Retail investors who hold 27% of Shenzhen Pacific Union Precision Manufacturing Co., Ltd. (SHSE:688210) gained 25%, institutions profited as well

Key Insights

• Significant control over Shenzhen Pacific Union Precision Manufacturing by retail investors implies that the general public has more power to influence management and governance-related decisions
• A total of 7 investors have a majority stake in the company with 52% ownership
• 23% of Shenzhen Pacific Union Precision Manufacturing is held by insiders

To get a sense of who is truly in control of Shenzhen Pacific Union Precision Manufacturing Co., Ltd. (SHSE:688210), it is important to understand the ownership structure of the business. And the group that holds the biggest piece of the pie are retail investors with 27% ownership. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

While retail investors were the group that benefitted the most from last week’s CN¥689m market cap gain, institutions too had a 25% share in those profits.

Let's take a closer look to see what the different types of shareholders can tell us about Shenzhen Pacific Union Precision Manufacturing.

View our latest analysis for Shenzhen Pacific Union Precision Manufacturing

What Does The Institutional Ownership Tell Us About Shenzhen Pacific Union Precision Manufacturing?

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.

We can see that Shenzhen Pacific Union Precision Manufacturing does have institutional investors; and they hold a good portion of the company's stock. 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 Shenzhen Pacific Union Precision Manufacturing's historic earnings and revenue below, but keep in mind there's always more to the story.

Hedge funds don't have many shares in Shenzhen Pacific Union Precision Manufacturing. Looking at our data, we can see that the largest shareholder is the CEO Hu Yang with 22% of shares outstanding. In comparison, the second and third largest shareholders hold about 8.0% and 6.7% of the stock.

We also observed that the top 7 shareholders account for more than half of the share register, with a few smaller shareholders to balance the interests of the larger ones to a certain extent.

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. There is some analyst coverage of the stock, but it could still become more well known, with time.

Insider Ownership Of Shenzhen Pacific Union Precision Manufacturing

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. Company management run the business, but the CEO will answer to the board, even if he or she is a member of it.

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 information suggests that insiders maintain a significant holding in Shenzhen Pacific Union Precision Manufacturing Co., Ltd.. It has a market capitalization of just CN¥3.5b, and insiders have CN¥798m worth of shares in their own names. It is great to see insiders so invested in the business. It might be worth checking if those insiders have been buying recently.

General Public Ownership

The general public, who are usually individual investors, hold a 27% stake in Shenzhen Pacific Union Precision Manufacturing. 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 8.0%, private equity firms are in a position to play a role in shaping corporate strategy with a focus on value creation. Some investors might be encouraged by this, since private equity are sometimes able to encourage strategies that help the market see the value in the company. Alternatively, those holders might be exiting the investment after taking it public.

Private Company Ownership

Our data indicates that Private Companies hold 14%, 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:

It's always worth thinking about the different groups who own shares in a company. But to understand Shenzhen Pacific Union Precision Manufacturing better, we need to consider many other factors. Take risks for example - Shenzhen Pacific Union Precision Manufacturing has 3 warning signs (and 1 which is potentially serious) we think you should know about.

If you would prefer discover what analysts are predicting in terms of future growth, do not miss this free report on analyst forecasts.

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.