Key Insights

• Long Young Electronic (Kunshan)'s significant public companies ownership suggests that the key decisions are influenced by shareholders from the larger public
• 69% of the company is held by a single shareholder (Top Bright Holding Co., Ltd.)
• Using data from company's past performance alongside ownership research, one can better assess the future performance of a company

To get a sense of who is truly in control of Long Young Electronic (Kunshan) Co., Ltd. (SZSE:301389), it is important to understand the ownership structure of the business. And the group that holds the biggest piece of the pie are public companies with 69% ownership. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

And following last week's 8.0% decline in share price, public companies suffered the most losses.

Let's delve deeper into each type of owner of Long Young Electronic (Kunshan), beginning with the chart below.

What Does The Institutional Ownership Tell Us About Long Young Electronic (Kunshan)?

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.

Long Young Electronic (Kunshan) 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 Long Young Electronic (Kunshan)'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 Long Young Electronic (Kunshan). Top Bright Holding Co., Ltd. is currently the company's largest shareholder with 69% of shares outstanding. This essentially means that they have extensive influence, if not outright control, over the future of the corporation. With 2.0% and 0.8% of the shares outstanding respectively, Kunshan Qunzhan Business Consulting Partnership Enterprise (Limited Partnership) and Sova Capital are the second and third largest shareholders.

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 Long Young Electronic (Kunshan)

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.

We note our data does not show any board members holding shares, personally. It is unusual not to have at least some personal holdings by board members, so our data might be flawed. A good next step would be to check how much the CEO is paid.

General Public Ownership

With a 23% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Long Young Electronic (Kunshan). 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.

Public Company Ownership

Public companies currently own 69% of Long Young Electronic (Kunshan) stock. We can't be certain but it is quite possible this is a strategic stake. The businesses may be similar, or work together.

Next Steps:

While it is well worth considering the different groups that own a company, there are other factors that are even more important. Consider risks, for instance. Every company has them, and we've spotted 3 warning signs for Long Young Electronic (Kunshan) you should know about.

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