Chongqing Millison Technologies INC.'s (SZSE:301307) biggest owners are retail investors who got richer after stock soared 7.8% last week

Simply Wall St · 10/21 22:55

Key Insights

  • Significant control over Chongqing Millison Technologies by retail investors implies that the general public has more power to influence management and governance-related decisions
  • 54% of the business is held by the top 3 shareholders
  • Ownership research, combined with past performance data can help provide a good understanding of opportunities in a stock

A look at the shareholders of Chongqing Millison Technologies INC. (SZSE:301307) can tell us which group is most powerful. And the group that holds the biggest piece of the pie are retail investors with 43% ownership. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

As a result, retail investors were the biggest beneficiaries of last week’s 7.8% gain.

In the chart below, we zoom in on the different ownership groups of Chongqing Millison Technologies.

Check out our latest analysis for Chongqing Millison Technologies

ownership-breakdown
SZSE:301307 Ownership Breakdown October 21st 2024

What Does The Institutional Ownership Tell Us About Chongqing Millison Technologies?

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.

Less than 5% of Chongqing Millison Technologies is held by institutional investors. This suggests that some funds have the company in their sights, but many have not yet bought shares in it. If the business gets stronger from here, we could see a situation where more institutions are keen to buy. It is not uncommon to see a big share price rise if multiple institutional investors are trying to buy into a stock at the same time. So check out the historic earnings trajectory, below, but keep in mind it's the future that counts most.

earnings-and-revenue-growth
SZSE:301307 Earnings and Revenue Growth October 21st 2024

Hedge funds don't have many shares in Chongqing Millison Technologies. Millison Holdings Co., Ltd. is currently the largest shareholder, with 40% of shares outstanding. With 7.6% and 6.5% of the shares outstanding respectively, Kefei Yu and Wens (Shenzhen) Equity Investment Management Co., Ltd. are the second and third largest shareholders.

After doing some more digging, we found that the top 3 shareholders collectively control more than half of the company's shares, implying that they have considerable power to influence the company's decisions.

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. As far as we can tell there isn't analyst coverage of the company, so it is probably flying under the radar.

Insider Ownership Of Chongqing Millison Technologies

While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. 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.

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 some shares in Chongqing Millison Technologies INC.. It has a market capitalization of just CN¥5.2b, and insiders have CN¥416m worth of shares, in their own names. Some would say this shows alignment of interests between shareholders and the board. But it might be worth checking if those insiders have been selling.

General Public Ownership

The general public, who are usually individual investors, hold a 43% stake in Chongqing Millison Technologies. 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

Private equity firms hold a 6.5% stake in Chongqing Millison Technologies. This suggests they can be influential in key policy decisions. Some might like this, because private equity are sometimes activists who hold management accountable. But other times, private equity is selling out, having taking the company public.

Private Company Ownership

We can see that Private Companies own 41%, of the shares on issue. 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:

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 1 warning sign for Chongqing Millison Technologies 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.