Key Insights

• Significant control over Shanghai Laimu ElectronicsLtd by retail investors implies that the general public has more power to influence management and governance-related decisions
• The top 9 shareholders own 51% of the company
• 28% of Shanghai Laimu ElectronicsLtd is held by insiders

A look at the shareholders of Shanghai Laimu Electronics Co.,Ltd. (SHSE:603633) can tell us which group is most powerful. And the group that holds the biggest piece of the pie are retail investors with 38% ownership. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

Retail investors gained the most after market cap touched CN¥4.5b last week, while institutions who own 28% also benefitted.

In the chart below, we zoom in on the different ownership groups of Shanghai Laimu ElectronicsLtd.

Check out our latest analysis for Shanghai Laimu ElectronicsLtd

What Does The Institutional Ownership Tell Us About Shanghai Laimu ElectronicsLtd?

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 Laimu ElectronicsLtd 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. 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 Laimu ElectronicsLtd's historic earnings and revenue below, but keep in mind there's always more to the story.

Shanghai Laimu ElectronicsLtd is not owned by hedge funds. Our data shows that Pei Jiao Fang is the largest shareholder with 17% of shares outstanding. With 9.2% and 6.1% of the shares outstanding respectively, Xin Ai Zhu and Shanghai Guiwei Investment Consulting Co., Ltd. are the second and third largest shareholders. Xin Ai Zhu, who is the second-largest shareholder, also happens to hold the title of Chief Executive Officer.

We did some more digging and found that 9 of the top shareholders account for roughly 51% of the register, implying that along with larger shareholders, there are a few smaller shareholders, thereby balancing out each others interests somewhat.

While it makes sense to study institutional ownership data for a company, it also makes sense to study analyst sentiments to know which way the wind is blowing. We're not picking up on any analyst coverage of the stock at the moment, so the company is unlikely to be widely held.

Insider Ownership Of Shanghai Laimu ElectronicsLtd

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.

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 Laimu Electronics Co.,Ltd.. It has a market capitalization of just CN¥4.5b, and insiders have CN¥1.2b worth of shares in their own names. This may suggest that the founders still own a lot of shares. You can click here to see if they have been buying or selling.

General Public Ownership

With a 38% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Shanghai Laimu ElectronicsLtd. 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 6.1%, of the Shanghai Laimu ElectronicsLtd 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:

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. Take risks for example - Shanghai Laimu ElectronicsLtd has 1 warning sign we think you should be aware of.

Of course this may not be the best stock to buy. Therefore, you may wish to see our free collection of interesting prospects boasting favorable financials.

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.