Key Insights

• Insiders appear to have a vested interest in Shanghai Bright Power Semiconductor's growth, as seen by their sizeable ownership
• 64% of the business is held by the top 3 shareholders
• Institutions own 19% of Shanghai Bright Power Semiconductor

To get a sense of who is truly in control of Shanghai Bright Power Semiconductor Co., Ltd. (SHSE:688368), it is important to understand the ownership structure of the business. The group holding the most number of shares in the company, around 47% to be precise, is individual insiders. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

Clearly, insiders benefitted the most after the company's market cap rose by CN¥2.4b last week.

In the chart below, we zoom in on the different ownership groups of Shanghai Bright Power Semiconductor.

What Does The Institutional Ownership Tell Us About Shanghai Bright Power Semiconductor?

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.

As you can see, institutional investors have a fair amount of stake in Shanghai Bright Power Semiconductor. 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 Bright Power Semiconductor, (below). Of course, keep in mind that there are other factors to consider, too.

Hedge funds don't have many shares in Shanghai Bright Power Semiconductor. With a 25% stake, CEO Liqiang Hu is the largest shareholder. Feng Xia is the second largest shareholder owning 23% of common stock, and Hainan Jingzherui Venture Capital Partnership Enterprise (Limited Partnership) holds about 16% of the company stock.

To make our study more interesting, we found that the top 3 shareholders have a majority ownership in the company, meaning that they are powerful enough to influence the decisions of the company.

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. 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 Bright Power Semiconductor

While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. Management ultimately answers to the board. However, it is not uncommon for managers to be executive board members, especially if they are a founder or the CEO.

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.

It seems insiders own a significant proportion of Shanghai Bright Power Semiconductor Co., Ltd.. Insiders own CN¥4.3b worth of shares in the CN¥9.1b company. That's quite meaningful. Most would say this shows a good degree of alignment with shareholders, especially in a company of this size. You can click here to see if those insiders have been buying or selling.

General Public Ownership

The general public, who are usually individual investors, hold a 17% stake in Shanghai Bright Power Semiconductor. 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 Company Ownership

It seems that Private Companies own 16%, of the Shanghai Bright Power Semiconductor stock. 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:

It's always worth thinking about the different groups who own shares in a company. But to understand Shanghai Bright Power Semiconductor better, we need to consider many other factors. For instance, we've identified 1 warning sign for Shanghai Bright Power Semiconductor that you should be aware of.

If you are like me, you may want to think about whether this company will grow or shrink. Luckily, you can check this free report showing analyst forecasts for its 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.