Key Insights

• Significant control over Dioo Microcircuits Jiangsu by retail investors implies that the general public has more power to influence management and governance-related decisions
• 51% of the business is held by the top 8 shareholders
• Insider ownership in Dioo Microcircuits Jiangsu is 23%

Every investor in Dioo Microcircuits Co., Ltd. Jiangsu (SHSE:688381) should be aware of the most powerful shareholder groups. The group holding the most number of shares in the company, around 33% to be precise, is retail investors. Put another way, the group faces the maximum upside potential (or downside risk).

While retail investors were the group that reaped the most benefits after last week's 10% price gain, insiders also received a 23% cut.

Let's take a closer look to see what the different types of shareholders can tell us about Dioo Microcircuits Jiangsu.

What Does The Institutional Ownership Tell Us About Dioo Microcircuits Jiangsu?

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.

Dioo Microcircuits Jiangsu 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. 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 Dioo Microcircuits Jiangsu's historic earnings and revenue below, but keep in mind there's always more to the story.

We note that hedge funds don't have a meaningful investment in Dioo Microcircuits Jiangsu. Looking at our data, we can see that the largest shareholder is the CEO Jianhong Ju with 20% of shares outstanding. In comparison, the second and third largest shareholders hold about 7.0% and 5.8% of the stock.

We did some more digging and found that 8 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. There is some analyst coverage of the stock, but it could still become more well known, with time.

Insider Ownership Of Dioo Microcircuits Jiangsu

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. 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 information suggests that insiders maintain a significant holding in Dioo Microcircuits Co., Ltd. Jiangsu. Insiders have a CN¥1.1b stake in this CN¥4.9b business. 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

With a 33% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Dioo Microcircuits Jiangsu. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.

Private Equity Ownership

Private equity firms hold a 13% stake in Dioo Microcircuits Jiangsu. This suggests they can be influential in key policy decisions. 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

Our data indicates that Private Companies hold 20%, 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:

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. To that end, you should learn about the 3 warning signs we've spotted with Dioo Microcircuits Jiangsu (including 1 which is potentially serious) .

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.

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