Key Insights

• Significant insider control over Fujian Kuncai Material Technology implies vested interests in company growth
• Bing Xie owns 56% of the company
• Using data from company's past performance alongside ownership research, one can better assess the future performance of a company

Every investor in Fujian Kuncai Material Technology Co., Ltd. (SHSE:603826) should be aware of the most powerful shareholder groups. The group holding the most number of shares in the company, around 69% to be precise, is individual insiders. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

So, insiders of Fujian Kuncai Material Technology have a lot at stake and every decision they make on the company's future is important to them from a financial point of view.

Let's take a closer look to see what the different types of shareholders can tell us about Fujian Kuncai Material Technology.

View our latest analysis for Fujian Kuncai Material Technology

What Does The Institutional Ownership Tell Us About Fujian Kuncai Material Technology?

Many institutions measure their performance against an index that approximates the local market. So they usually pay more attention to companies that are included in major indices.

We can see that Fujian Kuncai Material Technology 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. 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 Fujian Kuncai Material Technology's earnings history below. Of course, the future is what really matters.

Hedge funds don't have many shares in Fujian Kuncai Material Technology. With a 56% stake, CEO Bing Xie is the largest shareholder. This essentially means that they have significant control over the outcome or future of the company, which is why insider ownership is usually looked upon favourably by prospective buyers. Meanwhile, the second and third largest shareholders, hold 8.8% and 4.1%, of the shares outstanding, respectively.

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. While there is some analyst coverage, the company is probably not widely covered. So it could gain more attention, down the track.

Insider Ownership Of Fujian Kuncai Material Technology

While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. 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.

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 that insiders own more than half the Fujian Kuncai Material Technology Co., Ltd. stock. This gives them a lot of power. Given it has a market cap of CN¥24b, that means insiders have a whopping CN¥17b worth of shares in their own names. Most would argue this is a positive, showing strong alignment with shareholders. You can click here to see if they have been selling down their stake.

General Public Ownership

With a 19% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Fujian Kuncai Material Technology. 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

We can see that Private Companies own 4.1%, of the shares on issue. Private companies may be related parties. Sometimes insiders have an interest in a public company through a holding in a private company, rather than in their own capacity as an individual. While it's hard to draw any broad stroke conclusions, it is worth noting as an area for further research.

Next Steps:

While it is well worth considering the different groups that own a company, there are other factors that are even more important. Take risks for example - Fujian Kuncai Material Technology has 3 warning signs (and 2 which shouldn't be ignored) we think 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.