Key Insights

• Significant control over Micro-Tech (Nanjing)Ltd by private companies implies that the general public has more power to influence management and governance-related decisions
• 52% of the business is held by the top 4 shareholders
• Institutional ownership in Micro-Tech (Nanjing)Ltd is 26%

A look at the shareholders of Micro-Tech (Nanjing) Co.,Ltd (SHSE:688029) can tell us which group is most powerful. And the group that holds the biggest piece of the pie are private companies with 27% ownership. Put another way, the group faces the maximum upside potential (or downside risk).

Following a 4.5% increase in the stock price last week, private companies profited the most, but institutions who own 26% stock also stood to gain from the increase.

Let's delve deeper into each type of owner of Micro-Tech (Nanjing)Ltd, beginning with the chart below.

What Does The Institutional Ownership Tell Us About Micro-Tech (Nanjing)Ltd?

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.

We can see that Micro-Tech (Nanjing)Ltd does have institutional investors; and they hold a good portion of the company's stock. 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. It is not uncommon to see a big share price drop if two large institutional investors try to sell out of a stock at the same time. So it is worth checking the past earnings trajectory of Micro-Tech (Nanjing)Ltd, (below). Of course, keep in mind that there are other factors to consider, too.

Hedge funds don't have many shares in Micro-Tech (Nanjing)Ltd. China Science & Merchants Investment Management Group Co., Ltd. is currently the largest shareholder, with 22% of shares outstanding. Nanjing New Weichuang Enterprise Management Consulting Co., Ltd. is the second largest shareholder owning 20% of common stock, and Evergreen Enterprises Holdings Limited holds about 7.0% of the company stock. Additionally, the company's CEO Derong Leng directly holds 1.3% of the total shares outstanding.

Our research also brought to light the fact that roughly 52% of the company is controlled by the top 4 shareholders suggesting that these owners wield significant influence on the business.

While studying institutional ownership for a company can add value to your research, it is also a good practice to research analyst recommendations to get a deeper understand of a stock's expected performance. There are plenty of analysts covering the stock, so it might be worth seeing what they are forecasting, too.

Insider Ownership Of Micro-Tech (Nanjing)Ltd

While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. Company management run the business, but the CEO will answer to the board, even if he or she is a member of it.

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.

We can see that insiders own shares in Micro-Tech (Nanjing) Co.,Ltd. The insiders have a meaningful stake worth CN¥407m. Most would see this as a real positive. If you would like to explore the question of insider alignment, you can click here to see if insiders have been buying or selling.

General Public Ownership

With a 22% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Micro-Tech (Nanjing)Ltd. 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 Equity Ownership

With an ownership of 22%, private equity firms are in a position to play a role in shaping corporate strategy with a focus on value creation. 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

Our data indicates that Private Companies hold 27%, of the company's shares. 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. Take risks for example - Micro-Tech (Nanjing)Ltd has 1 warning sign we think you should be aware of.

But ultimately it is the future, not the past, that will determine how well the owners of this business will do. Therefore we think it advisable to take a look at this free report showing whether analysts are predicting a brighter future.

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.