Unigroup Guoxin Microelectronics Co., Ltd.'s (SZSE:002049) market cap surged CN¥2.7b last week, individual investors who have a lot riding on the company were rewarded

Key Insights

• The considerable ownership by individual investors in Unigroup Guoxin Microelectronics indicates that they collectively have a greater say in management and business strategy
• 42% of the business is held by the top 25 shareholders
• Institutional ownership in Unigroup Guoxin Microelectronics is 17%

Every investor in Unigroup Guoxin Microelectronics Co., Ltd. (SZSE:002049) should be aware of the most powerful shareholder groups. We can see that individual investors own the lion's share in the company with 56% ownership. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

Clearly, individual investors benefitted the most after the company's market cap rose by CN¥2.7b last week.

In the chart below, we zoom in on the different ownership groups of Unigroup Guoxin Microelectronics.

See our latest analysis for Unigroup Guoxin Microelectronics

What Does The Institutional Ownership Tell Us About Unigroup Guoxin Microelectronics?

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 Unigroup Guoxin Microelectronics. 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. When multiple institutions own a stock, there's always a risk that they are in a 'crowded trade'. When such a trade goes wrong, multiple parties may compete to sell stock fast. This risk is higher in a company without a history of growth. You can see Unigroup Guoxin Microelectronics' historic earnings and revenue below, but keep in mind there's always more to the story.

Unigroup Guoxin Microelectronics is not owned by hedge funds. Beijing Zhiguangxin Holding Co., Ltd is currently the company's largest shareholder with 26% of shares outstanding. China Asset Management Co. Ltd. is the second largest shareholder owning 1.8% of common stock, and GF Fund Management Co., Ltd. holds about 1.8% of the company stock.

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.

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. There are plenty of analysts covering the stock, so it might be worth seeing what they are forecasting, too.

Insider Ownership Of Unigroup Guoxin Microelectronics

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.

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 data suggests that insiders own under 1% of Unigroup Guoxin Microelectronics Co., Ltd. in their own names. But they may have an indirect interest through a corporate structure that we haven't picked up on. It's a big company, so even a small proportional interest can create alignment between the board and shareholders. In this case insiders own CN¥12m worth of shares. Arguably, recent buying and selling is just as important to consider. You can click here to see if insiders have been buying or selling.

General Public Ownership

The general public, who are usually individual investors, hold a substantial 56% stake in Unigroup Guoxin Microelectronics, suggesting it is a fairly popular stock. This size of ownership gives investors from the general public some collective power. They can and probably do influence decisions on executive compensation, dividend policies and proposed business acquisitions.

Private Company Ownership

We can see that Private Companies own 27%, of the shares on issue. 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:

It's always worth thinking about the different groups who own shares in a company. But to understand Unigroup Guoxin Microelectronics better, we need to consider many other factors. Consider for instance, the ever-present spectre of investment risk. We've identified 1 warning sign with Unigroup Guoxin Microelectronics , and understanding them should be part of your investment process.

If you are like me, you may want to think about whether this company will grow or shrink. Luckily, you can check this free report showing analyst forecasts for its future.

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