Private companies among Anhui XDLK Microsystem Corporation Limited's (SHSE:688582) largest stockholders and were hit after last week's 12% price drop

Key Insights

• Significant control over Anhui XDLK Microsystem by private companies implies that the general public has more power to influence management and governance-related decisions
• 54% of the business is held by the top 4 shareholders
• Institutions own 15% of Anhui XDLK Microsystem

Every investor in Anhui XDLK Microsystem Corporation Limited (SHSE:688582) should be aware of the most powerful shareholder groups. With 56% stake, private companies possess the maximum shares in the company. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

And following last week's 12% decline in share price, private companies suffered the most losses.

Let's delve deeper into each type of owner of Anhui XDLK Microsystem, beginning with the chart below.

See our latest analysis for Anhui XDLK Microsystem

What Does The Institutional Ownership Tell Us About Anhui XDLK Microsystem?

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.

Anhui XDLK Microsystem already has institutions on the share registry. Indeed, they own a respectable stake in the company. 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. 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 Anhui XDLK Microsystem, (below). Of course, keep in mind that there are other factors to consider, too.

Anhui XDLK Microsystem is not owned by hedge funds. MEMSLink Corporation is currently the largest shareholder, with 20% of shares outstanding. Anhui North Microelectronics Research Institute Group Co., Ltd is the second largest shareholder owning 14% of common stock, and Beijing XDLK Microelectronics Technology Co., Ltd. holds about 13% of the company stock. Additionally, the company's CEO Ming Lin directly holds 1.2% of the total shares outstanding.

Our research also brought to light the fact that roughly 54% of the company is controlled by the top 4 shareholders suggesting that these owners wield significant influence on the business.

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

Insider Ownership Of Anhui XDLK Microsystem

While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. Management ultimately answers to the board. However, it is not uncommon for managers to be executive board members, especially if they are a founder or the CEO.

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 Anhui XDLK Microsystem Corporation Limited. The insiders have a meaningful stake worth CN¥532m. Most would see this as a real positive. If you would like to explore the question of insider alignment, 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 26% stake in Anhui XDLK Microsystem. 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 Company Ownership

We can see that Private Companies own 56%, of the shares on issue. 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:

It's always worth thinking about the different groups who own shares in a company. But to understand Anhui XDLK Microsystem 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 Anhui XDLK Microsystem , and understanding them should be part of your investment process.

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.