Key Insights

• Significant control over Shanghai Fudan Microelectronics Group by individual investors implies that the general public has more power to influence management and governance-related decisions
• 50% of the business is held by the top 18 shareholders
• 21% of Shanghai Fudan Microelectronics Group is held by Institutions

To get a sense of who is truly in control of Shanghai Fudan Microelectronics Group Company Limited (HKG:1385), it is important to understand the ownership structure of the business. With 44% stake, individual investors possess the maximum shares in the company. Put another way, the group faces the maximum upside potential (or downside risk).

And last week, individual investors endured the biggest losses as the stock fell by 5.6%.

Let's take a closer look to see what the different types of shareholders can tell us about Shanghai Fudan Microelectronics Group.

What Does The Institutional Ownership Tell Us About Shanghai Fudan Microelectronics Group?

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 Fudan Microelectronics Group. This suggests some credibility amongst professional investors. But we can't rely on that fact alone since institutions make bad investments sometimes, just like everyone does. 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 Shanghai Fudan Microelectronics Group'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 Shanghai Fudan Microelectronics Group. Looking at our data, we can see that the largest shareholder is Shanghai Fudan Science Technology Industry Holding Co., Ltd. with 13% of shares outstanding. Shanghai Fudan High Tech Company is the second largest shareholder owning 13% of common stock, and Shanghai Yikun Investment Management Consulting Partnership Enterprise (Limited Partnership) holds about 4.8% of the company stock. In addition, we found that Lei Shi, the CEO has 0.9% of the shares allocated to their name.

After doing some more digging, we found that the top 18 have the combined ownership of 50% in the company, suggesting that no single shareholder has significant control over 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. There is a little analyst coverage of the stock, but not much. So there is room for it to gain more coverage.

Insider Ownership Of Shanghai Fudan Microelectronics Group

The definition of an insider can differ slightly between different countries, but members of the board of directors always count. Company management run the business, but the CEO will answer to the board, even if he or she is a member of it.

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 some shares in Shanghai Fudan Microelectronics Group Company Limited. This is a big company, so it is good to see this level of alignment. Insiders own HK$490m worth of shares (at current prices). It is good to see this level of investment by insiders. You can check here to see if those insiders have been buying recently.

General Public Ownership

With a 44% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Shanghai Fudan Microelectronics Group. 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 33%, of the Shanghai Fudan Microelectronics Group stock. 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:

While it is well worth considering the different groups that own a company, there are other factors that are even more important. For example, we've discovered 3 warning signs for Shanghai Fudan Microelectronics Group that you should be aware of before investing here.

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.