Key Insights

• Wuxi DK Electronic MaterialsLtd's significant individual investors ownership suggests that the key decisions are influenced by shareholders from the larger public
• 49% of the business is held by the top 25 shareholders
• Insider ownership in Wuxi DK Electronic MaterialsLtd is 19%

To get a sense of who is truly in control of Wuxi DK Electronic Materials Co.,Ltd. (SZSE:300842), it is important to understand the ownership structure of the business. We can see that individual investors own the lion's share in the company with 50% ownership. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

Following a 7.1% increase in the stock price last week, individual investors profited the most, but insiders who own 19% stock also stood to gain from the increase.

In the chart below, we zoom in on the different ownership groups of Wuxi DK Electronic MaterialsLtd.

What Does The Institutional Ownership Tell Us About Wuxi DK Electronic MaterialsLtd?

Institutional investors commonly compare their own returns to the returns of a commonly followed index. So they generally do consider buying larger companies that are included in the relevant benchmark index.

As you can see, institutional investors have a fair amount of stake in Wuxi DK Electronic MaterialsLtd. This implies the analysts working for those institutions have looked at the stock and they like it. But just like anyone else, they could be wrong. If multiple institutions change their view on a stock at the same time, you could see the share price drop fast. It's therefore worth looking at Wuxi DK Electronic MaterialsLtd's earnings history below. Of course, the future is what really matters.

We note that hedge funds don't have a meaningful investment in Wuxi DK Electronic MaterialsLtd. The company's CEO Weili Shi is the largest shareholder with 15% of shares outstanding. Shanghai Qianying Investment Management Co., Ltd. is the second largest shareholder owning 5.1% of common stock, and Wuxi Shanghui Trading Partnership Enterprise (Limited Partnership) holds about 4.9% of the company stock.

Our studies suggest that the top 25 shareholders collectively control less than half of the company's shares, meaning that the company's shares are widely disseminated and there is no dominant shareholder.

While studying institutional ownership for a company can add value to your research, it is also a good practice to research analyst recommendations to get a deeper understand of a stock's expected performance. Quite a few analysts cover the stock, so you could look into forecast growth quite easily.

Insider Ownership Of Wuxi DK Electronic MaterialsLtd

The definition of an insider can differ slightly between different countries, but members of the board of directors always count. Company management run the business, but the CEO will answer to the board, even if he or she is a member of it.

Insider ownership is positive when it signals leadership are thinking like the true owners of the company. However, high insider ownership can also give immense power to a small group within the company. This can be negative in some circumstances.

It seems insiders own a significant proportion of Wuxi DK Electronic Materials Co.,Ltd.. It has a market capitalization of just CN¥7.6b, and insiders have CN¥1.4b worth of shares in their own names. That's quite significant. Most would be pleased to see the board is investing alongside them. You may wish to access this free chart showing recent trading by insiders.

General Public Ownership

With a 50% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Wuxi DK Electronic MaterialsLtd. This size of ownership, while considerable, may not be enough to change company policy if the decision is not in sync with other large shareholders.

Private Company Ownership

Our data indicates that Private Companies hold 9.2%, of the company's shares. It's hard to draw any conclusions from this fact alone, so its worth looking into who owns those private companies. Sometimes insiders or other related parties have an interest in shares in a public company through a separate private company.

Next Steps:

While it is well worth considering the different groups that own a company, there are other factors that are even more important. For example, we've discovered 3 warning signs for Wuxi DK Electronic MaterialsLtd (1 is significant!) that you should be aware of before investing here.

Ultimately the future is most important. You can access this free report on analyst forecasts for the company.

NB: Figures in this article are calculated using data from the last twelve months, which refer to the 12-month period ending on the last date of the month the financial statement is dated. This may not be consistent with full year annual report figures.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.