Hubei Xiangyuan New Material Technology Inc.'s (SZSE:300980) market cap increased by CN¥153m, insiders receive a 51% cut

Key Insights

• Significant insider control over Hubei Xiangyuan New Material Technology implies vested interests in company growth
• A total of 2 investors have a majority stake in the company with 51% ownership
• 13% of Hubei Xiangyuan New Material Technology is held by Institutions

Every investor in Hubei Xiangyuan New Material Technology Inc. (SZSE:300980) should be aware of the most powerful shareholder groups. We can see that individual insiders own the lion's share in the company with 51% ownership. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

Clearly, insiders benefitted the most after the company's market cap rose by CN¥153m last week.

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

Check out our latest analysis for Hubei Xiangyuan New Material Technology

What Does The Institutional Ownership Tell Us About Hubei Xiangyuan New 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 Hubei Xiangyuan New Material Technology does have institutional investors; and they hold a good portion of the company's stock. 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. 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 Hubei Xiangyuan New Material Technology, (below). Of course, keep in mind that there are other factors to consider, too.

Hubei Xiangyuan New Material Technology is not owned by hedge funds. Our data shows that Zhixiang Wei is the largest shareholder with 31% of shares outstanding. In comparison, the second and third largest shareholders hold about 20% and 4.1% of the stock. Qiong Wei, who is the second-largest shareholder, also happens to hold the title of Chief Executive Officer.

A more detailed study of the shareholder registry showed us that 2 of the top shareholders have a considerable amount of ownership in the company, via their 51% stake.

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. Our information suggests that there isn't any analyst coverage of the stock, so it is probably little known.

Insider Ownership Of Hubei Xiangyuan New Material Technology

While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. 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 that insiders own more than half the Hubei Xiangyuan New Material Technology Inc. stock. This gives them a lot of power. So they have a CN¥802m stake in this CN¥1.6b business. Most would be pleased to see the board is investing alongside them. You may wish todiscover (for free) if they have been buying or selling.

General Public Ownership

The general public-- including retail investors -- own 32% stake in the company, and hence can't easily be ignored. While this size of ownership may not be enough to sway a policy decision in their favour, they can still make a collective impact on company policies.

Private Company Ownership

Our data indicates that Private Companies hold 3.7%, of the company's shares. 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 Hubei Xiangyuan New Material Technology you should be aware of, and 1 of them is significant.

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.

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.