Long Young Electronic (Kunshan) Co., Ltd.'s (SZSE:301389) biggest owners are public companies who got richer after stock soared 23% last week

Key Insights

• Significant control over Long Young Electronic (Kunshan) by public companies implies that the general public has more power to influence management and governance-related decisions
• The largest shareholder of the company is Top Bright Holding Co., Ltd. with a 69% stake
• Ownership research, combined with past performance data can help provide a good understanding of opportunities in a stock

To get a sense of who is truly in control of Long Young Electronic (Kunshan) Co., Ltd. (SZSE:301389), it is important to understand the ownership structure of the business. The group holding the most number of shares in the company, around 69% to be precise, is public companies. Put another way, the group faces the maximum upside potential (or downside risk).

Clearly, public companies benefitted the most after the company's market cap rose by CN¥810m last week.

Let's take a closer look to see what the different types of shareholders can tell us about Long Young Electronic (Kunshan).

See our latest analysis for Long Young Electronic (Kunshan)

What Does The Institutional Ownership Tell Us About Long Young Electronic (Kunshan)?

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.

We can see that Long Young Electronic (Kunshan) 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. 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 Long Young Electronic (Kunshan)'s earnings history below. Of course, the future is what really matters.

We note that hedge funds don't have a meaningful investment in Long Young Electronic (Kunshan). Top Bright Holding Co., Ltd. is currently the largest shareholder, with 69% of shares outstanding. This implies that they have majority interest control of the future of the company. For context, the second largest shareholder holds about 2.0% of the shares outstanding, followed by an ownership of 0.9% by the third-largest shareholder.

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 a little analyst coverage of the stock, but not much. So there is room for it to gain more coverage.

Insider Ownership Of Long Young Electronic (Kunshan)

While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. 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.

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.

We note our data does not show any board members holding shares, personally. Given we are not picking up on insider ownership, we may have missing data. Therefore, it would be interesting to assess the CEO compensation and tenure, here.

General Public Ownership

With a 24% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Long Young Electronic (Kunshan). 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

It appears to us that public companies own 69% of Long Young Electronic (Kunshan). It's hard to say for sure but this suggests they have entwined business interests. This might be a strategic stake, so it's worth watching this space for changes in ownership.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand Long Young Electronic (Kunshan) better, we need to consider many other factors. Like risks, for instance. Every company has them, and we've spotted 4 warning signs for Long Young Electronic (Kunshan) (of which 2 are potentially serious!) you should know about.

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.