private companies who own 42% along with institutions invested in Chengdu M&S Electronics Technology Co.,Ltd. (SHSE:688311) saw increase in their holdings value last week

Key Insights

• Chengdu M&S Electronics TechnologyLtd's significant private companies ownership suggests that the key decisions are influenced by shareholders from the larger public
• The top 7 shareholders own 50% of the company
• Institutional ownership in Chengdu M&S Electronics TechnologyLtd is 31%

To get a sense of who is truly in control of Chengdu M&S Electronics Technology Co.,Ltd. (SHSE:688311), it is important to understand the ownership structure of the business. With 42% stake, private companies possess the maximum shares in the company. Put another way, the group faces the maximum upside potential (or downside risk).

While private companies were the group that reaped the most benefits after last week’s 10% price gain, institutions also received a 31% cut.

Let's take a closer look to see what the different types of shareholders can tell us about Chengdu M&S Electronics TechnologyLtd.

See our latest analysis for Chengdu M&S Electronics TechnologyLtd

What Does The Institutional Ownership Tell Us About Chengdu M&S Electronics TechnologyLtd?

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 Chengdu M&S Electronics 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. When multiple institutions own a stock, there's always a risk that they are in a 'crowded trade'. When such a trade goes wrong, multiple parties may compete to sell stock fast. This risk is higher in a company without a history of growth. You can see Chengdu M&S Electronics TechnologyLtd's historic earnings and revenue below, but keep in mind there's always more to the story.

Chengdu M&S Electronics TechnologyLtd is not owned by hedge funds. Looking at our data, we can see that the largest shareholder is Chengdu Rongtou Innovation Investment Co., Ltd. with 29% of shares outstanding. In comparison, the second and third largest shareholders hold about 7.4% and 3.4% of the stock. Additionally, the company's CEO Rong Liu directly holds 0.8% of the total shares outstanding.

We also observed that the top 7 shareholders account for more than half of the share register, with a few smaller shareholders to balance the interests of the larger ones to a certain extent.

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

Insider Ownership Of Chengdu M&S Electronics TechnologyLtd

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.

We can see that insiders own shares in Chengdu M&S Electronics Technology Co.,Ltd.. It has a market capitalization of just CN¥3.2b, and insiders have CN¥115m worth of shares, in their own names. This shows at least some alignment. You can click here to see if those insiders have been buying or selling.

General Public Ownership

The general public, who are usually individual investors, hold a 23% stake in Chengdu M&S Electronics TechnologyLtd. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.

Private Company Ownership

It seems that Private Companies own 42%, of the Chengdu M&S Electronics TechnologyLtd stock. 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. Consider for instance, the ever-present spectre of investment risk. We've identified 1 warning sign with Chengdu M&S Electronics TechnologyLtd , and understanding them should be part of your investment process.

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com