private companies who own 42% along with institutions invested in Suzhou Everbright Photonics Co., Ltd. (SHSE:688048) saw increase in their holdings value last week

Key Insights

• Suzhou Everbright Photonics' significant private companies ownership suggests that the key decisions are influenced by shareholders from the larger public
• A total of 5 investors have a majority stake in the company with 51% ownership
• Institutions own 30% of Suzhou Everbright Photonics

To get a sense of who is truly in control of Suzhou Everbright Photonics Co., Ltd. (SHSE:688048), it is important to understand the ownership structure of the business. We can see that private companies own the lion's share in the company with 42% ownership. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

Private companies gained the most after market cap touched CN¥8.5b last week, while institutions who own 30% also benefitted.

In the chart below, we zoom in on the different ownership groups of Suzhou Everbright Photonics.

View our latest analysis for Suzhou Everbright Photonics

What Does The Institutional Ownership Tell Us About Suzhou Everbright Photonics?

Institutions typically measure themselves against a benchmark when reporting to their own investors, so they often become more enthusiastic about a stock once it's included in a major index. We would expect most companies to have some institutions on the register, especially if they are growing.

As you can see, institutional investors have a fair amount of stake in Suzhou Everbright Photonics. 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 Suzhou Everbright Photonics' historic earnings and revenue below, but keep in mind there's always more to the story.

Suzhou Everbright Photonics is not owned by hedge funds. Suzhou Huafeng Investment Center is currently the company's largest shareholder with 18% of shares outstanding. Suzhou Yinglei Enterprise Management Partnership Enterprise (Limited Partnership) is the second largest shareholder owning 15% of common stock, and Changchun Changguang Precision Instrument Group Co., Ltd. holds about 6.5% of the company stock.

On looking further, we found that 51% of the shares are owned by the top 5 shareholders. In other words, these shareholders have a meaningful say in the decisions of the company.

Researching institutional ownership is a good way to gauge and filter a stock's expected performance. The same can be achieved by studying analyst sentiments. There are plenty of analysts covering the stock, so it might be worth seeing what they are forecasting, too.

Insider Ownership Of Suzhou Everbright Photonics

The definition of company insiders can be subjective and does vary between jurisdictions. Our data reflects individual insiders, capturing board members at the very least. 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.

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 Suzhou Everbright Photonics Co., Ltd.. The insiders have a meaningful stake worth CN¥134m. Most would see this as a real positive. If you would like to explore the question of insider alignment, you can click here to see if insiders have been buying or selling.

General Public Ownership

With a 20% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Suzhou Everbright Photonics. 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 Equity Ownership

With an ownership of 5.9%, private equity firms are in a position to play a role in shaping corporate strategy with a focus on value creation. Some might like this, because private equity are sometimes activists who hold management accountable. But other times, private equity is selling out, having taking the company public.

Private Company Ownership

We can see that Private Companies own 42%, of the shares on issue. 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:

It's always worth thinking about the different groups who own shares in a company. But to understand Suzhou Everbright Photonics better, we need to consider many other factors. To that end, you should be aware of the 1 warning sign we've spotted with Suzhou Everbright Photonics .

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.