Beijing YanDong MicroElectronic Co., Ltd.'s (SHSE:688172) market cap surged CN¥2.1b last week, private companies who have a lot riding on the company were rewarded

Key Insights

• Significant control over Beijing YanDong MicroElectronic by private companies implies that the general public has more power to influence management and governance-related decisions
• The top 2 shareholders own 59% of the company
• Ownership research, combined with past performance data can help provide a good understanding of opportunities in a stock

Every investor in Beijing YanDong MicroElectronic Co., Ltd. (SHSE:688172) should be aware of the most powerful shareholder groups. The group holding the most number of shares in the company, around 48% 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 9.1% gain.

Let's delve deeper into each type of owner of Beijing YanDong MicroElectronic, beginning with the chart below.

See our latest analysis for Beijing YanDong MicroElectronic

What Does The Institutional Ownership Tell Us About Beijing YanDong MicroElectronic?

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.

We can see that Beijing YanDong MicroElectronic 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. It is not uncommon to see a big share price drop if two large institutional investors try to sell out of a stock at the same time. So it is worth checking the past earnings trajectory of Beijing YanDong MicroElectronic, (below). Of course, keep in mind that there are other factors to consider, too.

Hedge funds don't have many shares in Beijing YanDong MicroElectronic. Our data shows that Beijing Electronics Holding Co., Ltd is the largest shareholder with 45% of shares outstanding. Meanwhile, the second and third largest shareholders, hold 14% and 11%, of the shares outstanding, respectively.

After doing some more digging, we found that the top 2 shareholders collectively control more than half of the company's shares, implying that they have considerable power to influence the company's decisions.

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 Beijing YanDong MicroElectronic

While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. Company management run the business, but the CEO will answer to the board, even if he or she is a member of it.

I generally consider insider ownership to be a good thing. However, on some occasions it makes it more difficult for other shareholders to hold the board accountable for decisions.

We note our data does not show any board members holding shares, personally. It is unusual not to have at least some personal holdings by board members, so our data might be flawed. A good next step would be to check how much the CEO is paid.

General Public Ownership

The general public-- including retail investors -- own 11% 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 34%, private equity firms could influence the Beijing YanDong MicroElectronic board. Sometimes we see private equity stick around for the long term, but generally speaking they have a shorter investment horizon and -- as the name suggests -- don't invest in public companies much. After some time they may look to sell and redeploy capital elsewhere.

Private Company Ownership

Our data indicates that Private Companies hold 48%, of the company's shares. 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:

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 - Beijing YanDong MicroElectronic has 1 warning sign we think you should be aware of.

Of course this may not be the best stock to buy. So take a peek at this free 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.