Micro-Tech (Nanjing) Co.,Ltd's (SHSE:688029) largest shareholders are private companies who were rewarded as market cap surged CN¥633m last week

Key Insights

• Micro-Tech (Nanjing)Ltd's significant private companies ownership suggests that the key decisions are influenced by shareholders from the larger public
• A total of 4 investors have a majority stake in the company with 52% ownership
• 21% of Micro-Tech (Nanjing)Ltd is held by Institutions

To get a sense of who is truly in control of Micro-Tech (Nanjing) Co.,Ltd (SHSE:688029), it is important to understand the ownership structure of the business. The group holding the most number of shares in the company, around 25% to be precise, is private companies. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

As a result, private companies were the biggest beneficiaries of last week’s 4.7% gain.

Let's take a closer look to see what the different types of shareholders can tell us about Micro-Tech (Nanjing)Ltd.

View our latest analysis for Micro-Tech (Nanjing)Ltd

What Does The Institutional Ownership Tell Us About Micro-Tech (Nanjing)Ltd?

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.

As you can see, institutional investors have a fair amount of stake in Micro-Tech (Nanjing)Ltd. 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 Micro-Tech (Nanjing)Ltd's historic earnings and revenue below, but keep in mind there's always more to the story.

We note that hedge funds don't have a meaningful investment in Micro-Tech (Nanjing)Ltd. Looking at our data, we can see that the largest shareholder is China Science & Merchants Investment Management Group Co., Ltd. with 22% of shares outstanding. Nanjing New Weichuang Enterprise Management Consulting Co., Ltd. is the second largest shareholder owning 20% of common stock, and National Council for Social Security Fund holds about 5.5% of the company stock. In addition, we found that Derong Leng, the CEO has 1.3% of the shares allocated to their name.

On looking further, we found that 52% of the shares are owned by the top 4 shareholders. In other words, these shareholders have a meaningful say in 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. Quite a few analysts cover the stock, so you could look into forecast growth quite easily.

Insider Ownership Of Micro-Tech (Nanjing)Ltd

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.

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 report that insiders do own shares in Micro-Tech (Nanjing) Co.,Ltd. This is a big company, so it is good to see this level of alignment. Insiders own CN¥416m worth of shares (at current prices). It is good to see this level of investment by insiders. You can check here to see if those insiders have been buying recently.

General Public Ownership

The general public-- including retail investors -- own 24% stake in the company, and hence can't easily be ignored. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.

Private Equity Ownership

With a stake of 22%, private equity firms could influence the Micro-Tech (Nanjing)Ltd board. Some investors might be encouraged by this, since private equity are sometimes able to encourage strategies that help the market see the value in the company. Alternatively, those holders might be exiting the investment after taking it public.

Private Company Ownership

We can see that Private Companies own 25%, of the shares on issue. 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. To that end, you should be aware of the 1 warning sign we've spotted with Micro-Tech (Nanjing)Ltd .

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.