Key Insights

• Shanghai Laimu ElectronicsLtd's significant individual investors ownership suggests that the key decisions are influenced by shareholders from the larger public
• The top 10 shareholders own 51% of the company
• Insider ownership in Shanghai Laimu ElectronicsLtd is 28%

Every investor in Shanghai Laimu Electronics Co.,Ltd. (SHSE:603633) should be aware of the most powerful shareholder groups. We can see that individual investors own the lion's share in the company with 42% ownership. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

While individual investors were the group that reaped the most benefits after last week's 12% price gain, insiders also received a 28% cut.

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

What Does The Institutional Ownership Tell Us About Shanghai Laimu 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.

Shanghai Laimu ElectronicsLtd already has institutions on the share registry. Indeed, they own a respectable stake in the company. This implies the analysts working for those institutions have looked at the stock and they like it. But just like anyone else, they could be wrong. 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 Shanghai Laimu ElectronicsLtd's historic earnings and revenue below, but keep in mind there's always more to the story.

Hedge funds don't have many shares in Shanghai Laimu ElectronicsLtd. Our data shows that Pei Fang is the largest shareholder with 17% of shares outstanding. With 9.2% and 6.1% of the shares outstanding respectively, Xin Ai Zhu and Shanghai Guiwei Investment Consulting Co., Ltd. are the second and third largest shareholders. Xin Ai Zhu, who is the second-largest shareholder, also happens to hold the title of Chief Executive Officer.

We did some more digging and found that 10 of the top shareholders account for roughly 51% of the register, implying that along with larger shareholders, there are a few smaller shareholders, thereby balancing out each others interests somewhat.

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. 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 Shanghai Laimu ElectronicsLtd

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.

It seems insiders own a significant proportion of Shanghai Laimu Electronics Co.,Ltd.. It has a market capitalization of just CN¥3.5b, and insiders have CN¥979m worth of shares in their own names. We would say this shows alignment with shareholders, but it is worth noting that the company is still quite small; some insiders may have founded the business. You can click here to see if those insiders have been buying or selling.

General Public Ownership

The general public, who are usually individual investors, hold a 42% stake in Shanghai Laimu 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

Private equity firms hold a 5.9% stake in Shanghai Laimu ElectronicsLtd. This suggests they can be influential in key policy decisions. Sometimes we see private equity stick around for the long term, but generally speaking they have a shorter investment horizon and -- as the name suggests -- don't invest in public companies much. After some time they may look to sell and redeploy capital elsewhere.

Private Company Ownership

It seems that Private Companies own 6.7%, of the Shanghai Laimu ElectronicsLtd 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:

While it is well worth considering the different groups that own a company, there are other factors that are even more important.

I like to dive deeper into how a company has performed in the past. You can find historic revenue and earnings in this detailed graph.

Of course this may not be the best stock to buy. So take a peek at this free free list of interesting companies.

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com