Key Insights

• Insiders appear to have a vested interest in Shenzhen Minglida Precision Technology's growth, as seen by their sizeable ownership
• The top 2 shareholders own 51% of the company
• 11% of Shenzhen Minglida Precision Technology is held by Institutions

A look at the shareholders of Shenzhen Minglida Precision Technology Co., Ltd. (SZSE:301268) can tell us which group is most powerful. With 55% stake, individual insiders possess the maximum shares in the company. Put another way, the group faces the maximum upside potential (or downside risk).

As market cap fell to CN¥11b last week, insiders would have faced the highest losses than any other shareholder groups of the company.

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

View our latest analysis for Shenzhen Minglida Precision Technology

What Does The Institutional Ownership Tell Us About Shenzhen Minglida Precision 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 Minglida Precision 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 Minglida Precision Technology's earnings history below. Of course, the future is what really matters.

Shenzhen Minglida Precision Technology is not owned by hedge funds. Looking at our data, we can see that the largest shareholder is the CEO Cheng Tao with 41% of shares outstanding. For context, the second largest shareholder holds about 10% of the shares outstanding, followed by an ownership of 6.5% by the third-largest shareholder. Interestingly, the second-largest shareholder, Xianming Zhang is also Senior Key Executive, again, pointing towards strong insider ownership amongst the company's top shareholders.

To make our study more interesting, we found that the top 2 shareholders have a majority ownership in the company, meaning that they are powerful enough to influence the decisions of 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 is some analyst coverage of the stock, but it could still become more well known, with time.

Insider Ownership Of Shenzhen Minglida Precision Technology

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

Our most recent data indicates that insiders own the majority of Shenzhen Minglida Precision Technology Co., Ltd.. This means they can collectively make decisions for the company. Insiders own CN¥6.0b worth of shares in the CN¥11b company. That's extraordinary! Most would be pleased to see the board is investing alongside them. You may wish to discover if they have been buying or selling.

General Public Ownership

The general public-- including retail investors -- own 24% stake in the company, and hence can't easily be ignored. 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

Our data indicates that Private Companies hold 8.9%, of the company's shares. 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 Shenzhen Minglida Precision Technology better, we need to consider many other factors. For instance, we've identified 3 warning signs for Shenzhen Minglida Precision Technology (1 is a bit concerning) that you should be aware of.

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.