Key Insights

• The considerable ownership by private companies in Mingyue Optical LensLtd indicates that they collectively have a greater say in management and business strategy
• The largest shareholder of the company is Shanghai Mingyue Industrial Co., Ltd. with a 55% stake
• 11% of Mingyue Optical LensLtd is held by Institutions

To get a sense of who is truly in control of Mingyue Optical Lens Co.,Ltd. (SZSE:301101), it is important to understand the ownership structure of the business. We can see that private companies own the lion's share in the company with 58% ownership. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

And following last week's 8.7% decline in share price, private companies suffered the most losses.

Let's delve deeper into each type of owner of Mingyue Optical LensLtd, beginning with the chart below.

What Does The Institutional Ownership Tell Us About Mingyue Optical LensLtd?

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.

We can see that Mingyue Optical LensLtd 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. 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 Mingyue Optical LensLtd's historic earnings and revenue below, but keep in mind there's always more to the story.

Mingyue Optical LensLtd is not owned by hedge funds. Shanghai Mingyue Industrial Co., Ltd. is currently the largest shareholder, with 55% of shares outstanding. This essentially means that they have extensive influence, if not outright control, over the future of the corporation. Shanghai Novich Positioning Investment Management Co., Ltd. is the second largest shareholder owning 6.3% of common stock, and National Council for Social Security Fund holds about 3.0% of the company stock. Furthermore, CEO Gongwan Xie is the owner of 2.5% of the company's shares.

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. There are plenty of analysts covering the stock, so it might be worth seeing what they are forecasting, too.

Insider Ownership Of Mingyue Optical LensLtd

While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. 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.

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 Mingyue Optical Lens Co.,Ltd.. In their own names, insiders own CN¥365m worth of stock in the CN¥4.4b company. It is good to see some investment by insiders, but it might be worth checking if those insiders have been buying.

General Public Ownership

The general public, who are usually individual investors, hold a 15% stake in Mingyue Optical LensLtd. 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 an ownership of 6.3%, 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

It seems that Private Companies own 58%, of the Mingyue Optical LensLtd 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 instance, we've identified 1 warning sign for Mingyue Optical LensLtd that you should be aware of.

If you would prefer discover what analysts are predicting in terms of future growth, do not miss this free report on analyst forecasts.

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