Private companies among Mingyue Optical Lens Co.,Ltd.'s (SZSE:301101) largest stockholders and were hit after last week's 8.0% price drop

Key Insights

• Significant control over Mingyue Optical LensLtd by private companies implies that the general public has more power to influence management and governance-related decisions
• Shanghai Mingyue Industrial Co., Ltd. owns 55% of the company
• Institutional ownership in Mingyue Optical LensLtd is 11%

Every investor in Mingyue Optical Lens Co.,Ltd. (SZSE:301101) should be aware of the most powerful shareholder groups. And the group that holds the biggest piece of the pie are private companies with 58% ownership. Put another way, the group faces the maximum upside potential (or downside risk).

And following last week's 8.0% decline in share price, private companies suffered the most losses.

Let's take a closer look to see what the different types of shareholders can tell us about Mingyue Optical LensLtd.

View our latest analysis for Mingyue Optical LensLtd

What Does The Institutional Ownership Tell Us About Mingyue Optical LensLtd?

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.

We can see that Mingyue Optical LensLtd does have institutional investors; and they hold a good portion of the company's stock. This suggests some credibility amongst professional investors. But we can't rely on that fact alone since institutions make bad investments sometimes, just like everyone does. 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 Mingyue Optical LensLtd's historic earnings and revenue below, but keep in mind there's always more to the story.

Mingyue Optical LensLtd is not owned by hedge funds. Looking at our data, we can see that the largest shareholder is Shanghai Mingyue Industrial Co., Ltd. with 55% of shares outstanding. This essentially means that they have extensive influence, if not outright control, over the future of the corporation. Meanwhile, the second and third largest shareholders, hold 6.3% and 3.0%, of the shares outstanding, respectively. Furthermore, CEO Gongwan Xie is the owner of 2.5% of the company's shares.

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. There are plenty of analysts covering the stock, so it might be worth seeing what they are forecasting, too.

Insider Ownership Of Mingyue Optical LensLtd

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.

We can report that insiders do own shares in Mingyue Optical Lens Co.,Ltd.. It has a market capitalization of just CN¥4.4b, and insiders have CN¥365m worth of shares, in their own names. It is good to see some investment by insiders, but it might be worth checking if those insiders have been buying.

General Public Ownership

The general public, who are usually individual investors, hold a 15% stake in Mingyue Optical LensLtd. 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 6.3%, private equity firms are in a position to play a role in shaping corporate strategy with a focus on value creation. 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 58%, of the shares on issue. 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 Mingyue Optical LensLtd better, we need to consider many other factors. For example, we've discovered 1 warning sign for Mingyue Optical LensLtd that you should be aware of before investing here.

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.

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