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Shanghai Fudan Microelectronics Group Company Limited's (HKG:1385) Stock Price Dropped 5.3% Last Week; Private Companies Would Not Be Happy

Simply Wall St ·  {{timeTz}}

A look at the shareholders of Shanghai Fudan Microelectronics Group Company Limited (HKG:1385) can tell us which group is most powerful. And the group that holds the biggest piece of the pie are private companies with 42% ownership. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

As a result, private companies as a group endured the highest losses last week after market cap fell by HK$1.6b.

In the chart below, we zoom in on the different ownership groups of Shanghai Fudan Microelectronics Group.

View our latest analysis for Shanghai Fudan Microelectronics Group

ownership-breakdownSEHK:1385 Ownership Breakdown September 30th 2022

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 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.

earnings-and-revenue-growthSEHK:1385 Earnings and Revenue Growth September 30th 2022

Hedge funds don't have many shares in Shanghai Fudan Microelectronics Group. Shanghai Fudan Science Technology Industry Holding Co., Ltd. is currently the largest shareholder, with 13% of shares outstanding. For context, the second largest shareholder holds about 13% of the shares outstanding, followed by an ownership of 8.2% by the third-largest shareholder. Furthermore, CEO Lei Shi is the owner of 1.1% of the company's shares.

Looking at the shareholder registry, we can see that 51% of the ownership is controlled by the top 11 shareholders, meaning that no single shareholder has a majority interest in the ownership.

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 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 company insiders can be subjective and does vary between jurisdictions. Our data reflects individual insiders, capturing board members at the very least. 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.

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.

Shareholders would probably be interested to learn that insiders own shares in Shanghai Fudan Microelectronics Group Company Limited. The insiders have a meaningful stake worth HK$1.4b. Most would see this as a real positive. 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, who are usually individual investors, hold a 35% stake in 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 42%, 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:

I find it very interesting to look at who exactly owns a company. But to truly gain insight, we need to consider other information, too. For instance, we've identified 1 warning sign for Shanghai Fudan Microelectronics Group that you should be aware of.

But ultimately it is the future, not the past, that will determine how well the owners of this business will do. Therefore we think it advisable to take a look at this free report showing whether analysts are predicting a brighter 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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
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.

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