Key Insights

• The considerable ownership by retail investors in Southchip Semiconductor Technology(Shanghai) indicates that they collectively have a greater say in management and business strategy
• A total of 6 investors have a majority stake in the company with 50% ownership
• Insider ownership in Southchip Semiconductor Technology(Shanghai) is 17%

Every investor in Southchip Semiconductor Technology(Shanghai) Co., Ltd. (SHSE:688484) should be aware of the most powerful shareholder groups. With 33% stake, retail investors possess the maximum shares in the company. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

Clearly, retail investors benefitted the most after the company's market cap rose by CN¥745m last week.

Let's take a closer look to see what the different types of shareholders can tell us about Southchip Semiconductor Technology(Shanghai).

What Does The Institutional Ownership Tell Us About Southchip Semiconductor Technology(Shanghai)?

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.

Southchip Semiconductor Technology(Shanghai) already has institutions on the share registry. Indeed, they own a respectable stake in the company. 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 Southchip Semiconductor Technology(Shanghai)'s historic earnings and revenue below, but keep in mind there's always more to the story.

Southchip Semiconductor Technology(Shanghai) is not owned by hedge funds. The company's largest shareholder is Chenjie Ruan, with ownership of 17%. Shanghai Chenmu Information Technology Partnership Enterprise (Limited Partnership) is the second largest shareholder owning 12% of common stock, and Shanghai Integrated Circuit Industry Investment Fund Management Co., Ltd. holds about 5.9% of the company stock.

On further inspection, we found that more than half the company's shares are owned by the top 6 shareholders, suggesting that the interests of the larger shareholders are balanced out to an extent by the smaller ones.

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. 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 Southchip Semiconductor Technology(Shanghai)

The definition of an insider can differ slightly between different countries, but members of the board of directors always count. 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.

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 information suggests that insiders maintain a significant holding in Southchip Semiconductor Technology(Shanghai) Co., Ltd.. It is very interesting to see that insiders have a meaningful CN¥2.5b stake in this CN¥15b business. It is good to see this level of investment. 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 33% stake in Southchip Semiconductor Technology(Shanghai). 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 Equity Ownership

With a stake of 11%, private equity firms could influence the Southchip Semiconductor Technology(Shanghai) board. Some investors might be encouraged by this, since private equity are sometimes able to encourage strategies that help the market see the value in the company. Alternatively, those holders might be exiting the investment after taking it public.

Private Company Ownership

It seems that Private Companies own 19%, of the Southchip Semiconductor Technology(Shanghai) 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.

Public Company Ownership

Public companies currently own 7.3% of Southchip Semiconductor Technology(Shanghai) stock. We can't be certain but it is quite possible this is a strategic stake. The businesses may be similar, or work together.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand Southchip Semiconductor Technology(Shanghai) better, we need to consider many other factors. For example, we've discovered 2 warning signs for Southchip Semiconductor Technology(Shanghai) (1 can't be ignored!) that you should be aware of before investing here.

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.

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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.