Retail investors invested in Guangdong Leadyo IC Testing Co., Ltd. (SHSE:688135) up 10% last week, insiders too were rewarded

Key Insights

• Guangdong Leadyo IC Testing's significant retail investors ownership suggests that the key decisions are influenced by shareholders from the larger public
• 46% of the business is held by the top 25 shareholders
• Insiders own 44% of Guangdong Leadyo IC Testing

To get a sense of who is truly in control of Guangdong Leadyo IC Testing Co., Ltd. (SHSE:688135), it is important to understand the ownership structure of the business. The group holding the most number of shares in the company, around 54% to be precise, is retail investors. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

Retail investors gained the most after market cap touched CN¥4.0b last week, while insiders who own 44% also benefitted.

Let's take a closer look to see what the different types of shareholders can tell us about Guangdong Leadyo IC Testing.

See our latest analysis for Guangdong Leadyo IC Testing

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

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.

Institutions have a very small stake in Guangdong Leadyo IC Testing. That indicates that the company is on the radar of some funds, but it isn't particularly popular with professional investors at the moment. If the business gets stronger from here, we could see a situation where more institutions are keen to buy. It is not uncommon to see a big share price rise if multiple institutional investors are trying to buy into a stock at the same time. So check out the historic earnings trajectory, below, but keep in mind it's the future that counts most.

Hedge funds don't have many shares in Guangdong Leadyo IC Testing. Our data shows that Jiang Huang is the largest shareholder with 30% of shares outstanding. Meanwhile, the second and third largest shareholders, hold 3.6% and 3.2%, of the shares outstanding, respectively. Zhu Huang, who is the third-largest shareholder, also happens to hold the title of Member of the Board of Directors.

A deeper look at our ownership data shows that the top 25 shareholders collectively hold less than half of the register, suggesting a large group of small holders where no single shareholder has a majority.

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. 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. 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.

Our information suggests that insiders maintain a significant holding in Guangdong Leadyo IC Testing Co., Ltd.. It has a market capitalization of just CN¥4.0b, and insiders have CN¥1.8b worth of shares in their own names. This may suggest that the founders still own a lot of shares. You can click here to see if they 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. With this amount of ownership, retail investors can collectively play a role in decisions that affect shareholder returns, such as dividend policies and the appointment of directors. They can also exercise the power to vote on acquisitions or mergers that may not improve profitability.

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. Take risks for example - Guangdong Leadyo IC Testing has 2 warning signs we think you should be aware of.

Of course this may not be the best stock to buy. Therefore, you may wish to see our free collection of interesting prospects boasting favorable financials.

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.

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

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.