Insiders were the key beneficiaries as Shenzhen China Micro Semicon Co., Ltd.'s (SHSE:688380) market cap rises to CN¥11b

Key Insights

• Significant insider control over Shenzhen China Micro Semicon implies vested interests in company growth
• The top 2 shareholders own 55% of the company
• Using data from company's past performance alongside ownership research, one can better assess the future performance of a company

A look at the shareholders of Shenzhen China Micro Semicon Co., Ltd. (SHSE:688380) can tell us which group is most powerful. And the group that holds the biggest piece of the pie are individual insiders with 66% ownership. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

As a result, insiders were the biggest beneficiaries of last week’s 10% gain.

Let's take a closer look to see what the different types of shareholders can tell us about Shenzhen China Micro Semicon.

Check out our latest analysis for Shenzhen China Micro Semicon

What Does The Institutional Ownership Tell Us About Shenzhen China Micro Semicon?

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.

As you can see, institutional investors have a fair amount of stake in Shenzhen China Micro Semicon. This can indicate that the company has a certain degree of credibility in the investment community. However, it is best to be wary of relying on the supposed validation that comes with institutional investors. They too, get it wrong sometimes. If multiple institutions change their view on a stock at the same time, you could see the share price drop fast. It's therefore worth looking at Shenzhen China Micro Semicon's earnings history below. Of course, the future is what really matters.

We note that hedge funds don't have a meaningful investment in Shenzhen China Micro Semicon. Yang Yong is currently the largest shareholder, with 32% of shares outstanding. Meanwhile, the second and third largest shareholders, hold 23% and 4.1%, of the shares outstanding, respectively. Two of the top three shareholders happen to be Chief Executive Officer and Chairman of Corporate Board, respectively. That is, insiders feature higher up in the heirarchy of the company's top shareholders.

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.

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. As far as we can tell there isn't analyst coverage of the company, so it is probably flying under the radar.

Insider Ownership Of Shenzhen China Micro Semicon

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.

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.

It seems that insiders own more than half the Shenzhen China Micro Semicon Co., Ltd. stock. This gives them a lot of power. Given it has a market cap of CN¥11b, that means insiders have a whopping CN¥7.1b worth of shares in their own names. Most would argue this is a positive, showing strong alignment with shareholders. You can click here to see if they have been selling down their stake.

General Public Ownership

The general public, who are usually individual investors, hold a 19% stake in Shenzhen China Micro Semicon. 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 Company Ownership

Our data indicates that Private Companies hold 6.0%, of the company's shares. Private companies may be related parties. Sometimes insiders have an interest in a public company through a holding in a private company, rather than in their own capacity as an individual. While it's hard to draw any broad stroke conclusions, it is worth noting as an area for further research.

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. For instance, we've identified 3 warning signs for Shenzhen China Micro Semicon (2 are a bit unpleasant) that you should be aware of.

If you would prefer check out another company -- one with potentially superior financials -- then do not miss this free list of interesting companies, backed by strong financial data.

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.