Key Insights

• Significant insider control over Shanghai Friendess Electronic Technology implies vested interests in company growth
• A total of 4 investors have a majority stake in the company with 59% ownership
• Institutional ownership in Shanghai Friendess Electronic Technology is 17%

To get a sense of who is truly in control of Shanghai Friendess Electronic Technology Corporation Limited (SHSE:688188), it is important to understand the ownership structure of the business. With 68% stake, individual insiders possess the maximum shares in the company. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

As a result, insiders were the biggest beneficiaries of last week's 4.6% gain.

Let's delve deeper into each type of owner of Shanghai Friendess Electronic Technology, beginning with the chart below.

What Does The Institutional Ownership Tell Us About Shanghai Friendess Electronic Technology?

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.

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

We note that hedge funds don't have a meaningful investment in Shanghai Friendess Electronic Technology. Ye Tang is currently the largest shareholder, with 19% of shares outstanding. For context, the second largest shareholder holds about 15% of the shares outstanding, followed by an ownership of 13% by the third-largest shareholder.

On looking further, we found that 59% of the shares are owned by the top 4 shareholders. In other words, these shareholders have a meaningful say in 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. There are a reasonable number of analysts covering the stock, so it might be useful to find out their aggregate view on the future.

Insider Ownership Of Shanghai Friendess Electronic Technology

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.

Our most recent data indicates that insiders own the majority of Shanghai Friendess Electronic Technology Corporation Limited. This means they can collectively make decisions for the company. Given it has a market cap of CN¥47b, that means insiders have a whopping CN¥32b worth of shares in their own names. It is good to see this level of investment. You can check here to see if those insiders have been selling any of their shares.

General Public Ownership

With a 15% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Shanghai Friendess Electronic Technology. 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.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand Shanghai Friendess Electronic Technology better, we need to consider many other factors. To that end, you should be aware of the 1 warning sign we've spotted with Shanghai Friendess Electronic Technology .

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.