Key Insights

• Significant control over Wuxi Rural Commercial BankLtd by individual investors implies that the general public has more power to influence management and governance-related decisions
• The top 12 shareholders own 50% of the company
• 11% of Wuxi Rural Commercial BankLtd is held by Institutions

If you want to know who really controls Wuxi Rural Commercial Bank Co.,Ltd (SHSE:600908), then you'll have to look at the makeup of its share registry. The group holding the most number of shares in the company, around 45% to be precise, is individual investors. Put another way, the group faces the maximum upside potential (or downside risk).

And last week, individual investors endured the biggest losses as the stock fell by 5.5%.

Let's take a closer look to see what the different types of shareholders can tell us about Wuxi Rural Commercial BankLtd.

What Does The Institutional Ownership Tell Us About Wuxi Rural Commercial BankLtd?

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.

Wuxi Rural Commercial BankLtd already has institutions on the share registry. Indeed, they own a respectable stake in the company. 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. When multiple institutions own a stock, there's always a risk that they are in a 'crowded trade'. When such a trade goes wrong, multiple parties may compete to sell stock fast. This risk is higher in a company without a history of growth. You can see Wuxi Rural Commercial BankLtd's historic earnings and revenue below, but keep in mind there's always more to the story.

We note that hedge funds don't have a meaningful investment in Wuxi Rural Commercial BankLtd. Our data shows that Wuxi Taihu New City Development Group Co.,Ltd is the largest shareholder with 8.9% of shares outstanding. CNOOC Investment Co., Ltd. is the second largest shareholder owning 7.6% of common stock, and Great Wall Life Insurance Co., Ltd, Asset Management Arm holds about 7.0% of the company stock.

A closer look at our ownership figures suggests that the top 12 shareholders have a combined ownership of 50% implying that no single shareholder has a majority.

Researching institutional ownership is a good way to gauge and filter a stock's expected performance. The same can be achieved by studying analyst sentiments. There are a reasonable number of analysts covering the stock, so it might be useful to find out their aggregate view on the future.

Insider Ownership Of Wuxi Rural Commercial BankLtd

The definition of an insider can differ slightly between different countries, but members of the board of directors always count. The company management answer to the board and the latter should represent the interests of shareholders. Notably, sometimes top-level managers are on the board themselves.

I generally consider insider ownership to be a good thing. However, on some occasions it makes it more difficult for other shareholders to hold the board accountable for decisions.

Our data suggests that insiders own under 1% of Wuxi Rural Commercial Bank Co.,Ltd in their own names. We do note, however, it is possible insiders have an indirect interest through a private company or other corporate structure. It is a pretty big company, so it would be possible for board members to own a meaningful interest in the company, without owning much of a proportional interest. In this case, they own around CN¥25m worth of shares (at current prices). It is always good to see at least some insider ownership, but it might be worth checking if those insiders have been selling.

General Public Ownership

The general public, who are usually individual investors, hold a 45% stake in Wuxi Rural Commercial BankLtd. 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 Equity Ownership

With a stake of 7.6%, private equity firms could influence the Wuxi Rural Commercial BankLtd board. Some might like this, because private equity are sometimes activists who hold management accountable. But other times, private equity is selling out, having taking the company public.

Private Company Ownership

Our data indicates that Private Companies hold 36%, 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:

It's always worth thinking about the different groups who own shares in a company. But to understand Wuxi Rural Commercial BankLtd better, we need to consider many other factors. Be aware that Wuxi Rural Commercial BankLtd is showing 1 warning sign in our investment analysis , you should know about...

If you are like me, you may want to think about whether this company will grow or shrink. Luckily, you can check this free report showing analyst forecasts for its future.

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.