Shenzhen Minglida Precision Technology Co., Ltd.'s (SZSE:301268) largest shareholder, CEO Cheng Tao sees holdings value fall by 5.6% following recent drop

Key Insights

• Shenzhen Minglida Precision Technology's significant insider ownership suggests inherent interests in company's expansion
• The top 3 shareholders own 55% of the company
• Using data from company's past performance alongside ownership research, one can better assess the future performance of a company

If you want to know who really controls Shenzhen Minglida Precision Technology Co., Ltd. (SZSE:301268), then you'll have to look at the makeup of its share registry. We can see that individual insiders own the lion's share in the company with 55% ownership. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

As a result, insiders as a group endured the highest losses after market cap fell by CN¥419m.

Let's delve deeper into each type of owner of Shenzhen Minglida Precision Technology, beginning with the chart below.

View our latest analysis for Shenzhen Minglida Precision Technology

What Does The Institutional Ownership Tell Us About Shenzhen Minglida Precision 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 Shenzhen Minglida Precision 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 Shenzhen Minglida Precision Technology, (below). Of course, keep in mind that there are other factors to consider, too.

Shenzhen Minglida Precision Technology is not owned by hedge funds. With a 38% stake, CEO Cheng Tao is the largest shareholder. With 10% and 6.5% of the shares outstanding respectively, Xianming Zhang and Suqian Saihui Enterprise Management Partnership (Limited Partnership) are the second and third largest shareholders. Interestingly, the second-largest shareholder, Xianming Zhang is also Senior Key Executive, again, pointing towards strong insider ownership amongst the company's top shareholders.

To make our study more interesting, we found that the top 3 shareholders have a majority ownership in the company, meaning that they are powerful enough to influence the decisions of the company.

While studying institutional ownership for a company can add value to your research, it is also a good practice to research analyst recommendations to get a deeper understand of a stock's expected performance. Our information suggests that there isn't any analyst coverage of the stock, so it is probably little known.

Insider Ownership Of Shenzhen Minglida Precision Technology

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

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.

It seems that insiders own more than half the Shenzhen Minglida Precision Technology Co., Ltd. stock. This gives them a lot of power. So they have a CN¥3.9b stake in this CN¥7.0b 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, who are usually individual investors, hold a 23% stake in Shenzhen Minglida Precision 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

Our data indicates that Private Companies hold 11%, 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:

It's always worth thinking about the different groups who own shares in a company. But to understand Shenzhen Minglida Precision Technology better, we need to consider many other factors. Take risks for example - Shenzhen Minglida Precision Technology has 1 warning sign we think 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.