Individual investors are Maxscend Microelectronics Company Limited's (SZSE:300782) biggest owners and were hit after market cap dropped CN¥1.3b

Key Insights

• Significant control over Maxscend Microelectronics by individual investors implies that the general public has more power to influence management and governance-related decisions
• 50% of the business is held by the top 11 shareholders
• Insider ownership in Maxscend Microelectronics is 28%

Every investor in Maxscend Microelectronics Company Limited (SZSE:300782) should be aware of the most powerful shareholder groups. The group holding the most number of shares in the company, around 36% to be precise, is individual investors. Put another way, the group faces the maximum upside potential (or downside risk).

Following a 3.0% decrease in the stock price last week, individual investors suffered the most losses, but insiders who own 28% stock also took a hit.

In the chart below, we zoom in on the different ownership groups of Maxscend Microelectronics.

View our latest analysis for Maxscend Microelectronics

What Does The Institutional Ownership Tell Us About Maxscend Microelectronics?

Institutional investors commonly compare their own returns to the returns of a commonly followed index. So they generally do consider buying larger companies that are included in the relevant benchmark index.

We can see that Maxscend Microelectronics 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 Maxscend Microelectronics' historic earnings and revenue below, but keep in mind there's always more to the story.

Hedge funds don't have many shares in Maxscend Microelectronics. Wuxi Huizhi Lianhe Investment Enterprise (Limited Partnership) is currently the largest shareholder, with 11% of shares outstanding. With 7.6% and 6.6% of the shares outstanding respectively, Chenhui Feng and Zhihan Xu are the second and third largest shareholders. Note that the second and third-largest shareholders are also Senior Key Executive and Chairman of the Board, respectively, meaning that the company's top shareholders are insiders.

After doing some more digging, we found that the top 11 have the combined ownership of 50% in the company, suggesting that no single shareholder has significant control over the company.

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

Insider Ownership Of Maxscend Microelectronics

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.

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 Maxscend Microelectronics Company Limited. It is very interesting to see that insiders have a meaningful CN¥12b stake in this CN¥42b business. Most would say this shows a good degree of alignment with shareholders, especially in a company of this size. You can click here to see if those insiders have been buying or selling.

General Public Ownership

With a 36% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Maxscend Microelectronics. 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

It seems that Private Companies own 11%, of the Maxscend Microelectronics stock. 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:

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. For example, we've discovered 2 warning signs for Maxscend Microelectronics (1 shouldn't be ignored!) that you should be aware of before investing here.

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.