Key Insights

• Significant insider control over Kunshan Kinglai Hygienic MaterialsLtd implies vested interests in company growth
• 56% of the business is held by the top 4 shareholders
• Institutional ownership in Kunshan Kinglai Hygienic MaterialsLtd is 24%

A look at the shareholders of Kunshan Kinglai Hygienic Materials Co.,Ltd. (SZSE:300260) can tell us which group is most powerful. And the group that holds the biggest piece of the pie are individual insiders with 58% ownership. Put another way, the group faces the maximum upside potential (or downside risk).

And following last week's 6.7% decline in share price, insiders suffered the most losses.

Let's take a closer look to see what the different types of shareholders can tell us about Kunshan Kinglai Hygienic MaterialsLtd.

What Does The Institutional Ownership Tell Us About Kunshan Kinglai Hygienic MaterialsLtd?

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.

As you can see, institutional investors have a fair amount of stake in Kunshan Kinglai Hygienic MaterialsLtd. This suggests some credibility amongst professional investors. But we can't rely on that fact alone since institutions make bad investments sometimes, just like everyone does. 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 Kinglai Hygienic MaterialsLtd, (below). Of course, keep in mind that there are other factors to consider, too.

Kunshan Kinglai Hygienic MaterialsLtd is not owned by hedge funds. Looking at our data, we can see that the largest shareholder is the CEO Shuibo Li with 25% of shares outstanding. Meanwhile, the second and third largest shareholders, hold 17% and 6.9%, of the shares outstanding, respectively. Interestingly, the third-largest shareholder, Baihua Li is also a Member of the Board of Directors, again, indicating strong insider ownership amongst the company's top shareholders.

Our research also brought to light the fact that roughly 56% of the company is controlled by the top 4 shareholders suggesting that these owners wield significant influence on the business.

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 is a little analyst coverage of the stock, but not much. So there is room for it to gain more coverage.

Insider Ownership Of Kunshan Kinglai Hygienic MaterialsLtd

While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. Management ultimately answers to the board. However, it is not uncommon for managers to be executive board members, especially if they are a founder or the CEO.

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 Kunshan Kinglai Hygienic Materials Co.,Ltd. stock. This gives them a lot of power. That means insiders have a very meaningful CN¥5.4b stake in this CN¥9.3b business. 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 18% stake in the company, and hence can't easily be ignored. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.

Next Steps:

I find it very interesting to look at who exactly owns a company. But to truly gain insight, we need to consider other information, too. To that end, you should learn about the 2 warning signs we've spotted with Kunshan Kinglai Hygienic MaterialsLtd (including 1 which is a bit concerning) .

If you would prefer discover what analysts are predicting in terms of future growth, do not miss this free report on analyst forecasts.

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.