retail investors who own 26% along with institutions invested in Brite Semiconductor (Shanghai) Co., Ltd. (SHSE:688691) saw increase in their holdings value last week

Key Insights

• The considerable ownership by retail investors in Brite Semiconductor (Shanghai) indicates that they collectively have a greater say in management and business strategy
• The top 7 shareholders own 52% of the company
• Institutional ownership in Brite Semiconductor (Shanghai) is 24%

To get a sense of who is truly in control of Brite Semiconductor (Shanghai) Co., Ltd. (SHSE:688691), it is important to understand the ownership structure of the business. We can see that retail investors own the lion's share in the company with 26% ownership. 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¥6.5b last week, while institutions who own 24% also benefitted.

In the chart below, we zoom in on the different ownership groups of Brite Semiconductor (Shanghai).

Check out our latest analysis for Brite Semiconductor (Shanghai)

What Does The Institutional Ownership Tell Us About Brite Semiconductor (Shanghai)?

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.

As you can see, institutional investors have a fair amount of stake in Brite Semiconductor (Shanghai). 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 Brite Semiconductor (Shanghai), (below). Of course, keep in mind that there are other factors to consider, too.

Hedge funds don't have many shares in Brite Semiconductor (Shanghai). Our data shows that Semiconductor Manufacturing International Corporation is the largest shareholder with 14% of shares outstanding. With 12% and 10% of the shares outstanding respectively, Haitong New Energy Private Equity Management Co., Ltd. and NVP Associates, LLC are the second and third largest shareholders. Furthermore, CEO Zhiqing Zhuang is the owner of 2.6% of the company's shares.

On further inspection, we found that more than half the company's shares are owned by the top 7 shareholders, suggesting that the interests of the larger shareholders are balanced out to an extent by the smaller ones.

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 Brite Semiconductor (Shanghai)

The definition of an insider can differ slightly between different countries, but members of the board of directors always count. 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 most recent data indicates that insiders own some shares in Brite Semiconductor (Shanghai) Co., Ltd.. It has a market capitalization of just CN¥6.5b, and insiders have CN¥168m worth of shares, in their own names. This shows at least some alignment. You can click here to see if those insiders have been buying or selling.

General Public Ownership

The general public-- including retail investors -- own 26% stake in the company, and hence can't easily be ignored. This size of ownership, while considerable, may not be enough to change company policy if the decision is not in sync with other large shareholders.

Private Equity Ownership

With an ownership of 22%, private equity firms are in a position to play a role in shaping corporate strategy with a focus on value creation. Some might like this, because private equity are sometimes activists who hold management accountable. But other times, private equity is selling out, having taking the company public.

Private Company Ownership

Our data indicates that Private Companies hold 12%, 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.

Public Company Ownership

We can see that public companies hold 14% of the Brite Semiconductor (Shanghai) shares on issue. This may be a strategic interest and the two companies may have related business interests. It could be that they have de-merged. This holding is probably worth investigating further.

Next Steps:

While it is well worth considering the different groups that own a company, there are other factors that are even more important. Consider risks, for instance. Every company has them, and we've spotted 1 warning sign for Brite Semiconductor (Shanghai) you should know about.

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.

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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