Retail investors who hold 38% of Shanghai Laimu Electronics Co.,Ltd. (SHSE:603633) gained 12%, insiders profited as well

Key Insights

• Shanghai Laimu ElectronicsLtd's significant retail investors ownership suggests that the key decisions are influenced by shareholders from the larger public
• The top 10 shareholders own 52% of the company
• Insiders own 28% of Shanghai Laimu ElectronicsLtd

If you want to know who really controls Shanghai Laimu Electronics Co.,Ltd. (SHSE:603633), then you'll have to look at the makeup of its share registry. We can see that retail investors own the lion's share in the company with 38% ownership. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

Following a 12% increase in the stock price last week, retail investors profited the most, but insiders who own 28% stock also stood to gain from the increase.

Let's delve deeper into each type of owner of Shanghai Laimu ElectronicsLtd, beginning with the chart below.

See our latest analysis for Shanghai Laimu ElectronicsLtd

What Does The Institutional Ownership Tell Us About Shanghai Laimu ElectronicsLtd?

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.

As you can see, institutional investors have a fair amount of stake in Shanghai Laimu ElectronicsLtd. 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 Shanghai Laimu ElectronicsLtd, (below). Of course, keep in mind that there are other factors to consider, too.

We note that hedge funds don't have a meaningful investment in Shanghai Laimu ElectronicsLtd. Pei Fang is currently the company's largest shareholder with 17% of shares outstanding. With 9.2% and 6.1% of the shares outstanding respectively, Xin Ai Zhu and Shanghai Guiwei Investment Consulting Co., Ltd. are the second and third largest shareholders. Xin Ai Zhu, who is the second-largest shareholder, also happens to hold the title of Chief Executive Officer.

On further inspection, we found that more than half the company's shares are owned by the top 10 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. As far as we can tell there isn't analyst coverage of the company, so it is probably flying under the radar.

Insider Ownership Of Shanghai Laimu ElectronicsLtd

The definition of an insider can differ slightly between different countries, but members of the board of directors always count. 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.

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 a reasonable proportion of Shanghai Laimu Electronics Co.,Ltd.. Insiders have a CN¥779m stake in this CN¥2.8b business. We would say this shows alignment with shareholders, but it is worth noting that the company is still quite small; some insiders may have founded the business. You can click here to see if those insiders have been buying or selling.

General Public Ownership

With a 38% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Shanghai Laimu ElectronicsLtd. 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 an ownership of 5.9%, private equity firms are in a position to play a role in shaping corporate strategy with a focus on value creation. 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

It seems that Private Companies own 6.7%, of the Shanghai Laimu ElectronicsLtd 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 1 warning sign for Shanghai Laimu ElectronicsLtd you should be aware of.

Of course this may not be the best stock to buy. Therefore, you may wish to see our free collection of interesting prospects boasting favorable financials.

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.