Private companies are Anhui XDLK Microsystem Corporation Limited's (SHSE:688582) biggest owners and were hit after market cap dropped CN¥440m

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
• A total of 3 investors have a majority stake in the company with 54% ownership
• Institutional ownership in Anhui XDLK Microsystem is 16%

Every investor in Anhui XDLK Microsystem Corporation Limited (SHSE:688582) should be aware of the most powerful shareholder groups. We can see that private companies own the lion's share in the company with 56% ownership. Put another way, the group faces the maximum upside potential (or downside risk).

And last week, private companies endured the biggest losses as the stock fell by 3.3%.

In the chart below, we zoom in on the different ownership groups of Anhui XDLK Microsystem.

View 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.

As you can see, institutional investors have a fair amount of stake in Anhui XDLK Microsystem. 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. Looking at our data, we can see that the largest shareholder is MEMSLink Corporation with 20% of shares outstanding. China North Industries Group Corporation Limited is the second largest shareholder owning 20% 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.

After doing some more digging, we found that the top 3 shareholders collectively control more than half of the company's shares, implying that they have considerable power to influence the company's decisions.

While it makes sense to study institutional ownership data for a company, it also makes sense to study analyst sentiments to know which way the wind is blowing. There is some analyst coverage of the stock, but it could still become more well known, with time.

Insider Ownership Of Anhui XDLK Microsystem

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.

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 most recent data indicates that insiders own some shares in Anhui XDLK Microsystem Corporation Limited. This is a big company, so it is good to see this level of alignment. Insiders own CN¥380m worth of shares (at current prices). Most would say this shows alignment of interests between shareholders and the board. Still, it might be worth checking if those insiders have been selling.

General Public Ownership

The general public-- including retail investors -- own 25% stake in the company, and hence can't easily be ignored. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.

Private Company Ownership

Our data indicates that Private Companies hold 56%, of the company's shares. 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 Anhui XDLK Microsystem better, we need to consider many other factors. Take risks for example - Anhui XDLK Microsystem has 3 warning signs (and 1 which can't be ignored) we think you should know about.

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.