Key Insights
- Significant control over Shanghai Fudan Microelectronics Group by private companies implies that the general public has more power to influence management and governance-related decisions
- The top 7 shareholders own 51% of the company
- Institutional ownership in Shanghai Fudan Microelectronics Group is 24%
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 43% stake, private companies possess the maximum shares in the company. Put another way, the group faces the maximum upside potential (or downside risk).
Meanwhile, individual investors make up 31% of the company’s shareholders.
Let's delve deeper into each type of owner of Shanghai Fudan Microelectronics Group, beginning with the chart below.
Check out our latest analysis for Shanghai Fudan Microelectronics Group
What Does The Institutional Ownership Tell Us About Shanghai Fudan Microelectronics Group?
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.
Shanghai Fudan Microelectronics Group already has institutions on the share registry. Indeed, they own a respectable stake in the company. 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 Fudan Microelectronics Group, (below). Of course, keep in mind that there are other factors to consider, too.
Shanghai Fudan Microelectronics Group is not owned by hedge funds. Looking at our data, we can see that the largest shareholder is Shanghai Fudan Science Technology Industry Holding Co., Ltd. with 25% of shares outstanding. For context, the second largest shareholder holds about 13% of the shares outstanding, followed by an ownership of 4.3% by the third-largest shareholder. In addition, we found that Lei Shi, the CEO has 0.9% of the shares allocated to their name.
We also observed that the top 7 shareholders account for more than half of the share register, with a few smaller shareholders to balance the interests of the larger ones to a certain extent.
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 some analyst coverage of the stock, but it could still become more well known, with time.
Insider Ownership Of Shanghai Fudan Microelectronics Group
The definition of company insiders can be subjective and does vary between jurisdictions. Our data reflects individual insiders, capturing board members at the very least. 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.
Most consider insider ownership a positive because it can indicate the board is well aligned with other shareholders. However, on some occasions too much power is concentrated within this group.
We can report that insiders do own 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$664m 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
The general public-- including retail investors -- own 31% stake in the company, and hence can't easily be ignored. 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 43%, of the Shanghai Fudan Microelectronics Group 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 example, we've discovered 1 warning sign for Shanghai Fudan Microelectronics Group that you should be aware of before investing here.
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.