Insiders were the key beneficiaries as Shenzhen China Micro Semicon Co., Ltd.'s (SHSE:688380) market cap rises to CN¥12b

Key Insights

• Insiders appear to have a vested interest in Shenzhen China Micro Semicon's growth, as seen by their sizeable ownership
• The top 2 shareholders own 55% of the company
• Past performance of a company along with ownership data serve to give a strong idea about prospects for a business

If you want to know who really controls Shenzhen China Micro Semicon Co., Ltd. (SHSE:688380), then you'll have to look at the makeup of its share registry. The group holding the most number of shares in the company, around 66% to be precise, is individual insiders. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

As a result, insiders were the biggest beneficiaries of last week’s 5.5% gain.

Let's delve deeper into each type of owner of Shenzhen China Micro Semicon, beginning with the chart below.

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.

Shenzhen China Micro Semicon already has institutions on the share registry. Indeed, they own a respectable stake in the company. This implies the analysts working for those institutions have looked at the stock and they like it. But just like anyone else, they could be wrong. 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 Shenzhen China Micro Semicon, (below). Of course, keep in mind that there are other factors to consider, too.

We note that hedge funds don't have a meaningful investment in Shenzhen China Micro Semicon. Looking at our data, we can see that the largest shareholder is Yang Yong with 32% of shares outstanding. In comparison, the second and third largest shareholders hold about 23% and 4.1% of the stock. Note that the second and third-largest shareholders are also Chief Executive Officer and Chairman of Corporate Board, respectively, meaning that the company's top shareholders are insiders.

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 studying institutional ownership for a company can add value to your research, it is also a good practice to research analyst recommendations to get a deeper understand of a stock's expected performance. Our information suggests that there isn't any analyst coverage of the stock, so it is probably little known.

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. 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.

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.

Our information suggests that insiders own more than half of Shenzhen China Micro Semicon Co., Ltd.. This gives them effective control of the company. Given it has a market cap of CN¥12b, that means insiders have a whopping CN¥8.2b worth of shares in their own names. It is good to see this level of investment. You can check here to see if those insiders have been selling any of their shares.

General Public Ownership

The general public-- including retail investors -- own 19% 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 Company Ownership

It seems that Private Companies own 5.9%, of the Shenzhen China Micro Semicon stock. 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:

It's always worth thinking about the different groups who own shares in a company. But to understand Shenzhen China Micro Semicon better, we need to consider many other factors. Case in point: We've spotted 4 warning signs for Shenzhen China Micro Semicon you should be aware of, and 1 of them shouldn't be ignored.

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.