Individual investors who hold 54% of Guangdong Leadyo IC Testing Co., Ltd. (SHSE:688135) gained 11%, insiders profited as well

Key Insights

• The considerable ownership by individual investors in Guangdong Leadyo IC Testing indicates that they collectively have a greater say in management and business strategy
• A total of 25 investors have a majority stake in the company with 46% ownership
• 44% of Guangdong Leadyo IC Testing is held by insiders

If you want to know who really controls Guangdong Leadyo IC Testing Co., Ltd. (SHSE:688135), then you'll have to look at the makeup of its share registry. We can see that individual investors own the lion's share in the company with 54% ownership. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

While individual investors were the group that reaped the most benefits after last week’s 11% price gain, insiders also received a 44% cut.

In the chart below, we zoom in on the different ownership groups of Guangdong Leadyo IC Testing.

Check out our latest analysis for Guangdong Leadyo IC Testing

What Does The Institutional Ownership Tell Us About Guangdong Leadyo IC Testing?

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.

Less than 5% of Guangdong Leadyo IC Testing is held by institutional investors. This suggests that some funds have the company in their sights, but many have not yet bought shares in it. If the business gets stronger from here, we could see a situation where more institutions are keen to buy. When multiple institutional investors want to buy shares, we often see a rising share price. The past revenue trajectory (shown below) can be an indication of future growth, but there are no guarantees.

We note that hedge funds don't have a meaningful investment in Guangdong Leadyo IC Testing. Jiang Huang is currently the largest shareholder, with 30% of shares outstanding. In comparison, the second and third largest shareholders hold about 3.6% and 3.2% of the stock. Zhu Huang, who is the third-largest shareholder, also happens to hold the title of Member of the Board of Directors.

Our studies suggest that the top 25 shareholders collectively control less than half of the company's shares, meaning that the company's shares are widely disseminated and there is no dominant shareholder.

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. Our information suggests that there isn't any analyst coverage of the stock, so it is probably little known.

Insider Ownership Of Guangdong Leadyo IC Testing

While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. 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.

Our most recent data indicates that insiders own a reasonable proportion of Guangdong Leadyo IC Testing Co., Ltd.. Insiders have a CN¥1.5b stake in this CN¥3.4b business. We would say this shows alignment with shareholders, but it is worth noting that the company is still quite small; some insiders may have founded the business. You can click here to see if those insiders have been buying or selling.

General Public Ownership

The general public, who are usually individual investors, hold a substantial 54% stake in Guangdong Leadyo IC Testing, suggesting it is a fairly popular stock. This level of ownership gives investors from the wider public some power to sway key policy decisions such as board composition, executive compensation, and the dividend payout ratio.

Next Steps:

I find it very interesting to look at who exactly owns a company. But to truly gain insight, we need to consider other information, too. Be aware that Guangdong Leadyo IC Testing is showing 4 warning signs in our investment analysis , and 2 of those are a bit concerning...

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.

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