Key Insights

• Insiders appear to have a vested interest in Kunshan Dongwei TechnologyLtd's growth, as seen by their sizeable ownership
• 51% of the business is held by the top 6 shareholders
• Institutional ownership in Kunshan Dongwei TechnologyLtd is 22%

Every investor in Kunshan Dongwei Technology Co.,Ltd. (SHSE:688700) should be aware of the most powerful shareholder groups. The group holding the most number of shares in the company, around 52% to be precise, is individual insiders. Put another way, the group faces the maximum upside potential (or downside risk).

As market cap fell to CN¥14b last week, insiders would have faced the highest losses than any other shareholder groups of the company.

In the chart below, we zoom in on the different ownership groups of Kunshan Dongwei TechnologyLtd.

See our latest analysis for Kunshan Dongwei TechnologyLtd

What Does The Institutional Ownership Tell Us About Kunshan Dongwei TechnologyLtd?

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.

We can see that Kunshan Dongwei TechnologyLtd does have institutional investors; and they hold a good portion of the company's stock. This can indicate that the company has a certain degree of credibility in the investment community. However, it is best to be wary of relying on the supposed validation that comes with institutional investors. They too, get it wrong sometimes. It is not uncommon to see a big share price drop if two large institutional investors try to sell out of a stock at the same time. So it is worth checking the past earnings trajectory of Kunshan Dongwei TechnologyLtd, (below). Of course, keep in mind that there are other factors to consider, too.

Kunshan Dongwei TechnologyLtd is not owned by hedge funds. Looking at our data, we can see that the largest shareholder is the CEO Jianbo Liu with 31% of shares outstanding. Meanwhile, the second and third largest shareholders, hold 5.1% and 4.4%, of the shares outstanding, respectively. Interestingly, the third-largest shareholder, Zhiguo Xiao is also a Member of the Board of Directors, again, indicating strong insider ownership amongst the company's top shareholders.

On further inspection, we found that more than half the company's shares are owned by the top 6 shareholders, suggesting that the interests of the larger shareholders are balanced out to an extent by the smaller ones.

While it makes sense to study institutional ownership data for a company, it also makes sense to study analyst sentiments to know which way the wind is blowing. 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 Kunshan Dongwei TechnologyLtd

The definition of company insiders can be subjective and does vary between jurisdictions. Our data reflects individual insiders, capturing board members at the very least. 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.

Most consider insider ownership a positive because it can indicate the board is well aligned with other shareholders. However, on some occasions too much power is concentrated within this group.

Our most recent data indicates that insiders own the majority of Kunshan Dongwei Technology Co.,Ltd.. This means they can collectively make decisions for the company. Given it has a market cap of CN¥14b, that means insiders have a whopping CN¥7.5b worth of shares in their own names. Most would be pleased to see the board is investing alongside them. You may wish to discover if they have been buying or selling.

General Public Ownership

The general public-- including retail investors -- own 22% stake in the company, and hence can't easily be ignored. 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

It seems that Private Companies own 4.2%, of the Kunshan Dongwei TechnologyLtd stock. It might be worth looking deeper into this. If related parties, such as insiders, have an interest in one of these private companies, that should be disclosed in the annual report. Private companies may also have a strategic interest in the 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. Case in point: We've spotted 3 warning signs for Kunshan Dongwei TechnologyLtd you should be aware of, and 1 of them can't be ignored.

But ultimately it is the future, not the past, that will determine how well the owners of this business will do. Therefore we think it advisable to take a look at this free report showing whether analysts are predicting a brighter 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.