Individual investors are Dioo Microcircuits Co., Ltd. Jiangsu's (SHSE:688381) biggest owners and were hit after market cap dropped CN¥1.1b

Simply Wall St · 10/16 00:54

Key Insights

  • The considerable ownership by individual investors in Dioo Microcircuits Jiangsu indicates that they collectively have a greater say in management and business strategy
  • 50% of the business is held by the top 8 shareholders
  • 23% of Dioo Microcircuits Jiangsu is held by insiders

If you want to know who really controls Dioo Microcircuits Co., Ltd. Jiangsu (SHSE:688381), then you'll have to look at the makeup of its share registry. We can see that individual investors own the lion's share in the company with 37% ownership. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

While insiders, who own 23% shares weren’t spared from last week’s CN¥1.1b market cap drop, individual investors as a group suffered the maximum losses

Let's take a closer look to see what the different types of shareholders can tell us about Dioo Microcircuits Jiangsu.

Check out our latest analysis for Dioo Microcircuits Jiangsu

ownership-breakdown
SHSE:688381 Ownership Breakdown October 16th 2024

What Does The Institutional Ownership Tell Us About Dioo Microcircuits Jiangsu?

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.

We can see that Dioo Microcircuits Jiangsu does have institutional investors; and they hold a good portion of the company's stock. This implies the analysts working for those institutions have looked at the stock and they like it. But just like anyone else, they could be wrong. 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 Dioo Microcircuits Jiangsu's historic earnings and revenue below, but keep in mind there's always more to the story.

earnings-and-revenue-growth
SHSE:688381 Earnings and Revenue Growth October 16th 2024

Dioo Microcircuits Jiangsu is not owned by hedge funds. With a 20% stake, CEO Jianhong Ju is the largest shareholder. For context, the second largest shareholder holds about 6.2% of the shares outstanding, followed by an ownership of 5.9% by the third-largest shareholder.

We did some more digging and found that 8 of the top shareholders account for roughly 50% 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. 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 Dioo Microcircuits Jiangsu

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. Company management run the business, but the CEO will answer to the board, even if he or she is a member of it.

I generally consider insider ownership to be a good thing. However, on some occasions it makes it more difficult for other shareholders to hold the board accountable for decisions.

Our most recent data indicates that insiders own a reasonable proportion of Dioo Microcircuits Co., Ltd. Jiangsu. Insiders own CN¥1.1b worth of shares in the CN¥4.6b company. We would say this shows alignment with shareholders, but it is worth noting that the company is still quite small; some insiders may have founded the business. You can click here to see if those insiders have been buying or selling.

General Public Ownership

The general public-- including retail investors -- own 37% 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 Equity Ownership

With an ownership of 12%, private equity firms are in a position to play a role in shaping corporate strategy with a focus on value creation. 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

We can see that Private Companies own 19%, of the shares on issue. Private companies may be related parties. Sometimes insiders have an interest in a public company through a holding in a private company, rather than in their own capacity as an individual. While it's hard to draw any broad stroke conclusions, it is worth noting as an area for further research.

Next Steps:

While it is well worth considering the different groups that own a company, there are other factors that are even more important. Case in point: We've spotted 4 warning signs for Dioo Microcircuits Jiangsu you should be aware of, and 1 of them is potentially serious.

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.