Insiders with their considerable ownership were the key benefactors as Shenzhen MinDe Electronics Technology Ltd. (SZSE:300656) touches CN¥4.2b market cap

Key Insights

• Significant insider control over Shenzhen MinDe Electronics Technology implies vested interests in company growth
• The top 5 shareholders own 54% of the company
• Past performance of a company along with ownership data serve to give a strong idea about prospects for a business

If you want to know who really controls Shenzhen MinDe Electronics Technology Ltd. (SZSE:300656), then you'll have to look at the makeup of its share registry. We can see that individual insiders own the lion's share in the company with 52% ownership. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

Clearly, insiders benefitted the most after the company's market cap rose by CN¥414m last week.

In the chart below, we zoom in on the different ownership groups of Shenzhen MinDe Electronics Technology.

See our latest analysis for Shenzhen MinDe Electronics Technology

What Does The Institutional Ownership Tell Us About Shenzhen MinDe Electronics Technology?

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.

Shenzhen MinDe Electronics Technology already has institutions on the share registry. Indeed, they own a respectable stake in the company. 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. 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 MinDe Electronics Technology's earnings history below. Of course, the future is what really matters.

Hedge funds don't have many shares in Shenzhen MinDe Electronics Technology. Our data shows that Wen Huan Xu is the largest shareholder with 25% of shares outstanding. In comparison, the second and third largest shareholders hold about 9.6% and 7.5% of the stock.

On looking further, we found that 54% of the shares are owned by the top 5 shareholders. In other words, these shareholders have a meaningful say in the decisions of the company.

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. We're not picking up on any analyst coverage of the stock at the moment, so the company is unlikely to be widely held.

Insider Ownership Of Shenzhen MinDe Electronics Technology

The definition of an insider can differ slightly between different countries, but members of the board of directors always count. 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.

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 own more than half of Shenzhen MinDe Electronics Technology Ltd.. This gives them effective control of the company. So they have a CN¥2.2b stake in this CN¥4.2b business. Most would be pleased to see the board is investing alongside them. You may wish todiscover (for free) if they have been buying or selling.

General Public Ownership

The general public, who are usually individual investors, hold a 35% stake in Shenzhen MinDe Electronics Technology. 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.

Public Company Ownership

We can see that public companies hold 6.9% of the Shenzhen MinDe Electronics Technology shares on issue. This may be a strategic interest and the two companies may have related business interests. It could be that they have de-merged. This holding is probably worth investigating further.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand Shenzhen MinDe Electronics Technology better, we need to consider many other factors. Case in point: We've spotted 1 warning sign for Shenzhen MinDe Electronics Technology you should be aware of.

Of course this may not be the best stock to buy. Therefore, you may wish to see our free collection of interesting prospects boasting favorable financials.

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.