Minami Acoustics Limited's (SZSE:301383) market cap increased by CN¥383m, insiders receive a 46% cut

Key Insights

• Insiders appear to have a vested interest in Minami Acoustics' growth, as seen by their sizeable ownership
• A total of 3 investors have a majority stake in the company with 59% ownership
• Past performance of a company along with ownership data serve to give a strong idea about prospects for a business

Every investor in Minami Acoustics Limited (SZSE:301383) should be aware of the most powerful shareholder groups. We can see that individual insiders own the lion's share in the company with 46% ownership. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

As a result, insiders were the biggest beneficiaries of last week’s 9.2% gain.

In the chart below, we zoom in on the different ownership groups of Minami Acoustics.

View our latest analysis for Minami Acoustics

What Does The Institutional Ownership Tell Us About Minami Acoustics?

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.

Minami Acoustics already has institutions on the share registry. Indeed, they own a respectable stake in the company. 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. If multiple institutions change their view on a stock at the same time, you could see the share price drop fast. It's therefore worth looking at Minami Acoustics' earnings history below. Of course, the future is what really matters.

Hedge funds don't have many shares in Minami Acoustics. The company's largest shareholder is Yanru Feng, with ownership of 25%. With 19% and 15% of the shares outstanding respectively, Minami (Guangzhou) Investment Holding Co., Ltd. and Weizhong Chen are the second and third largest shareholders. Weizhong Chen, who is the third-largest shareholder, also happens to hold the title of Vice Chairman.

After doing some more digging, we found that the top 3 shareholders collectively control more than half of the company's shares, implying that they have considerable power to influence the company's decisions.

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. While there is some analyst coverage, the company is probably not widely covered. So it could gain more attention, down the track.

Insider Ownership Of Minami Acoustics

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.

It seems insiders own a significant proportion of Minami Acoustics Limited. It has a market capitalization of just CN¥4.5b, and insiders have CN¥2.1b worth of shares in their own names. It is great to see insiders so invested in the business. It might be worth checking if those insiders have been buying recently.

General Public Ownership

The general public, who are usually individual investors, hold a 18% stake in Minami Acoustics. 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 28%, of the company's shares. It's hard to draw any conclusions from this fact alone, so its worth looking into who owns those private companies. Sometimes insiders or other related parties have an interest in shares in a public company through a separate private 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. Take risks for example - Minami Acoustics has 2 warning signs (and 1 which is concerning) we think you should know about.

If you are like me, you may want to think about whether this company will grow or shrink. Luckily, you can check this free report showing analyst forecasts for its 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.