Key Insights

• The considerable ownership by private equity firms in Hangzhou Mdk Opto ElectronicsLtd indicates that they collectively have a greater say in management and business strategy
• 51% of the business is held by the top 2 shareholders
• Institutional ownership in Hangzhou Mdk Opto ElectronicsLtd is 12%

Every investor in Hangzhou Mdk Opto Electronics Co.,Ltd (SHSE:688079) should be aware of the most powerful shareholder groups. With 41% stake, private equity firms possess the maximum shares in the company. Put another way, the group faces the maximum upside potential (or downside risk).

As a result, private equity firms were the biggest beneficiaries of last week's 12% gain.

Let's take a closer look to see what the different types of shareholders can tell us about Hangzhou Mdk Opto ElectronicsLtd.

What Does The Institutional Ownership Tell Us About Hangzhou Mdk Opto ElectronicsLtd?

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.

As you can see, institutional investors have a fair amount of stake in Hangzhou Mdk Opto ElectronicsLtd. 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 Hangzhou Mdk Opto ElectronicsLtd's earnings history below. Of course, the future is what really matters.

Hedge funds don't have many shares in Hangzhou Mdk Opto ElectronicsLtd. The company's largest shareholder is Lishui MDK Investment Partnership Enterprise (Limited Partnership), with ownership of 41%. Meanwhile, the second and third largest shareholders, hold 9.3% and 7.2%, of the shares outstanding, respectively.

A more detailed study of the shareholder registry showed us that 2 of the top shareholders have a considerable amount of ownership in the company, via their 51% stake.

Researching institutional ownership is a good way to gauge and filter a stock's expected performance. The same can be achieved by studying analyst sentiments. Our information suggests that there isn't any analyst coverage of the stock, so it is probably little known.

Insider Ownership Of Hangzhou Mdk Opto ElectronicsLtd

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. 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.

Insider ownership is positive when it signals leadership are thinking like the true owners of the company. However, high insider ownership can also give immense power to a small group within the company. This can be negative in some circumstances.

Our most recent data indicates that insiders own some shares in Hangzhou Mdk Opto Electronics Co.,Ltd. It has a market capitalization of just CN¥3.3b, and insiders have CN¥304m worth of shares, in their own names. Some would say this shows alignment of interests between shareholders and the board. But it might be worth checking if those insiders have been selling.

General Public Ownership

With a 26% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Hangzhou Mdk Opto ElectronicsLtd. While this size of ownership may not be enough to sway a policy decision in their favour, they can still make a collective impact on company policies.

Private Equity Ownership

With a stake of 41%, private equity firms could influence the Hangzhou Mdk Opto ElectronicsLtd board. Some might like this, because private equity are sometimes activists who hold management accountable. But other times, private equity is selling out, having taking the company public.

Private Company Ownership

It seems that Private Companies own 10%, of the Hangzhou Mdk Opto ElectronicsLtd stock. 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:

While it is well worth considering the different groups that own a company, there are other factors that are even more important. For example, we've discovered 2 warning signs for Hangzhou Mdk Opto ElectronicsLtd that you should be aware of before investing here.

If you would prefer check out another company -- one with potentially superior financials -- then do not miss this free list of interesting companies, backed by strong financial data.

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.