Ingenic Semiconductor Co.,Ltd.'s (SZSE:300223) market cap dropped CN¥944m last week; individual investors who hold 33% were hit as were institutions

Key Insights

• Ingenic SemiconductorLtd's significant retail investors ownership suggests that the key decisions are influenced by shareholders from the larger public
• A total of 9 investors have a majority stake in the company with 50% ownership
• Insiders own 17% of Ingenic SemiconductorLtd

Every investor in Ingenic Semiconductor Co.,Ltd. (SZSE:300223) should be aware of the most powerful shareholder groups. The group holding the most number of shares in the company, around 33% to be precise, is retail investors. Put another way, the group faces the maximum upside potential (or downside risk).

While institutions, who own 22% shares weren’t spared from last week’s CN¥944m market cap drop, retail investors as a group suffered the maximum losses

In the chart below, we zoom in on the different ownership groups of Ingenic SemiconductorLtd.

View our latest analysis for Ingenic SemiconductorLtd

What Does The Institutional Ownership Tell Us About Ingenic SemiconductorLtd?

Institutional investors commonly compare their own returns to the returns of a commonly followed index. So they generally do consider buying larger companies that are included in the relevant benchmark index.

As you can see, institutional investors have a fair amount of stake in Ingenic SemiconductorLtd. 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. 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 Ingenic SemiconductorLtd's historic earnings and revenue below, but keep in mind there's always more to the story.

Ingenic SemiconductorLtd is not owned by hedge funds. Beijing Yitang Semiconductor Industry Investment Center (Limited Partnership) is currently the company's largest shareholder with 13% of shares outstanding. In comparison, the second and third largest shareholders hold about 9.1% and 8.4% of the stock. Qiang Liu, who is the third-largest shareholder, also happens to hold the title of Chairman of the Board.

We did some more digging and found that 9 of the top shareholders account for roughly 50% of the register, implying that along with larger shareholders, there are a few smaller shareholders, thereby balancing out each others interests somewhat.

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 a reasonable number of analysts covering the stock, so it might be useful to find out their aggregate view on the future.

Insider Ownership Of Ingenic SemiconductorLtd

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.

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 maintain a significant holding in Ingenic Semiconductor Co.,Ltd.. It has a market capitalization of just CN¥28b, and insiders have CN¥4.7b worth of shares in their own names. That's quite significant. Most would be pleased to see the board is investing alongside them. You may wish to access this free chart showing recent trading by insiders.

General Public Ownership

The general public, who are usually individual investors, hold a 33% stake in Ingenic SemiconductorLtd. 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 Equity Ownership

With a stake of 9.1%, private equity firms could influence the Ingenic SemiconductorLtd 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

It seems that Private Companies own 15%, of the Ingenic SemiconductorLtd stock. 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.

Public Company Ownership

We can see that public companies hold 5.0% of the Ingenic SemiconductorLtd shares on issue. It's hard to say for sure but this suggests they have entwined business interests. This might be a strategic stake, so it's worth watching this space for changes in ownership.

Next Steps:

While it is well worth considering the different groups that own a company, there are other factors that are even more important.

Many find it useful to take an in depth look at how a company has performed in the past. You can access this detailed graph of past earnings, revenue and cash flow.

But ultimately it is the future, not the past, that will determine how well the owners of this business will do. Therefore we think it advisable to take a look at this free report showing whether analysts are predicting a brighter 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