Shenzhen Pacific Union Precision Manufacturing Co., Ltd.'s (SHSE:688210) market cap rose CN¥396m last week; individual investors who hold 31% profited and so did insiders

Key Insights

• Significant control over Shenzhen Pacific Union Precision Manufacturing by individual investors implies that the general public has more power to influence management and governance-related decisions
• The top 7 shareholders own 51% of the company
• 23% of Shenzhen Pacific Union Precision Manufacturing is held by insiders

Every investor in Shenzhen Pacific Union Precision Manufacturing Co., Ltd. (SHSE:688210) should be aware of the most powerful shareholder groups. The group holding the most number of shares in the company, around 31% to be precise, is individual investors. Put another way, the group faces the maximum upside potential (or downside risk).

Following a 13% increase in the stock price last week, individual investors profited the most, but insiders who own 23% stock also stood to gain from the increase.

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

Check out our latest analysis for Shenzhen Pacific Union Precision Manufacturing

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

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 Shenzhen Pacific Union Precision Manufacturing. 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. If multiple institutions change their view on a stock at the same time, you could see the share price drop fast. It's therefore worth looking at Shenzhen Pacific Union Precision Manufacturing's earnings history below. Of course, the future is what really matters.

Hedge funds don't have many shares in Shenzhen Pacific Union Precision Manufacturing. With a 22% stake, CEO Hu Yang is the largest shareholder. Shenzhen Capital Group Co., Ltd. is the second largest shareholder owning 7.1% of common stock, and Shenzhen Pute Technology Enterprise (Limited Partnership) holds about 6.7% of the company 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.

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. While there is some analyst coverage, the company is probably not widely covered. So it could gain more attention, down the track.

Insider Ownership Of Shenzhen Pacific Union Precision Manufacturing

The definition of an insider can differ slightly between different countries, but members of the board of directors always count. Company management run the business, but the CEO will answer to the board, even if he or she is a member of it.

Most consider insider ownership a positive because it can indicate the board is well aligned with other shareholders. However, on some occasions too much power is concentrated within this group.

Our most recent data indicates that insiders own a reasonable proportion of Shenzhen Pacific Union Precision Manufacturing Co., Ltd.. It has a market capitalization of just CN¥3.6b, and insiders have CN¥815m worth of shares in their own names. This may suggest that the founders still own a lot of shares. You can click here to see if they have been buying or selling.

General Public Ownership

With a 31% ownership, the general public, mostly comprising of individual investors, have some degree of sway over 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

Private equity firms hold a 7.1% stake in Shenzhen Pacific Union Precision Manufacturing. This suggests they can be influential in key policy decisions. 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 14%, of the Shenzhen Pacific Union Precision Manufacturing stock. It might be worth looking deeper into this. If related parties, such as insiders, have an interest in one of these private companies, that should be disclosed in the annual report. Private companies may also have a strategic interest in the company.

Next Steps:

I find it very interesting to look at who exactly owns a company. But to truly gain insight, we need to consider other information, too. Case in point: We've spotted 2 warning signs for Shenzhen Pacific Union Precision Manufacturing you should be aware of.

Ultimately the future is most important. You can access this free report on analyst forecasts for the company.

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