Key Insights

• Shanghai Fullhan Microelectronics' significant individual investors ownership suggests that the key decisions are influenced by shareholders from the larger public
• A total of 5 investors have a majority stake in the company with 52% ownership
• Insiders own 23% of Shanghai Fullhan Microelectronics

Every investor in Shanghai Fullhan Microelectronics Co., Ltd. (SZSE:300613) should be aware of the most powerful shareholder groups. We can see that individual investors own the lion's share in the company with 40% ownership. Put another way, the group faces the maximum upside potential (or downside risk).

Individual investors gained the most after market cap touched CN¥9.0b last week, while insiders who own 23% also benefitted.

In the chart below, we zoom in on the different ownership groups of Shanghai Fullhan Microelectronics.

What Does The Institutional Ownership Tell Us About Shanghai Fullhan Microelectronics?

Institutions typically measure themselves against a benchmark when reporting to their own investors, so they often become more enthusiastic about a stock once it's included in a major index. We would expect most companies to have some institutions on the register, especially if they are growing.

As you can see, institutional investors have a fair amount of stake in Shanghai Fullhan Microelectronics. This can indicate that the company has a certain degree of credibility in the investment community. However, it is best to be wary of relying on the supposed validation that comes with institutional investors. They too, get it wrong sometimes. 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 Shanghai Fullhan Microelectronics, (below). Of course, keep in mind that there are other factors to consider, too.

We note that hedge funds don't have a meaningful investment in Shanghai Fullhan Microelectronics. Hongjia Gong is currently the largest shareholder, with 16% of shares outstanding. In comparison, the second and third largest shareholders hold about 16% and 7.6% of the stock. Xiaoqi Yang, who is the third-largest shareholder, also happens to hold the title of Chairman of the Board.

On looking further, we found that 52% of the shares are owned by the top 5 shareholders. In other words, these shareholders have a meaningful say in the decisions of the company.

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. While there is some analyst coverage, the company is probably not widely covered. So it could gain more attention, down the track.

Insider Ownership Of Shanghai Fullhan Microelectronics

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.

I generally consider insider ownership to be a good thing. However, on some occasions it makes it more difficult for other shareholders to hold the board accountable for decisions.

Our most recent data indicates that insiders own a reasonable proportion of Shanghai Fullhan Microelectronics Co., Ltd.. It is very interesting to see that insiders have a meaningful CN¥2.1b stake in this CN¥9.0b business. It is good to see this level of investment. You can check here to see if those insiders have been buying recently.

General Public Ownership

With a 40% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Shanghai Fullhan Microelectronics. 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 22%, private equity firms could influence the Shanghai Fullhan Microelectronics board. Some investors might be encouraged by this, since private equity are sometimes able to encourage strategies that help the market see the value in the company. Alternatively, those holders might be exiting the investment after taking it public.

Private Company Ownership

Our data indicates that Private Companies hold 8.2%, 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 Shanghai Fullhan Microelectronics better, we need to consider many other factors. To that end, you should be aware of the 2 warning signs we've spotted with Shanghai Fullhan Microelectronics .

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