share_log

Insiders Were the Biggest Winners as Tianqi Lithium Corporation's (SZSE:002466) Market Cap Grew by CN¥8.6b Last Week

Simply Wall St ·  Jan 6, 2023 21:25

To get a sense of who is truly in control of Tianqi Lithium Corporation (SZSE:002466), it is important to understand the ownership structure of the business. We can see that individual insiders own the lion's share in the company with 34% ownership. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

Clearly, insiders benefitted the most after the company's market cap rose by CN¥8.6b last week.

Let's delve deeper into each type of owner of Tianqi Lithium, beginning with the chart below.

View our latest analysis for Tianqi Lithium

ownership-breakdown
SZSE:002466 Ownership Breakdown January 7th 2023

What Does The Institutional Ownership Tell Us About Tianqi Lithium?

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.

We can see that Tianqi Lithium does have institutional investors; and they hold a good portion of the company's stock. 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. 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 Tianqi Lithium, (below). Of course, keep in mind that there are other factors to consider, too.

earnings-and-revenue-growth
SZSE:002466 Earnings and Revenue Growth January 7th 2023

Tianqi Lithium is not owned by hedge funds. Our data shows that Silong Li is the largest shareholder with 30% of shares outstanding. In comparison, the second and third largest shareholders hold about 25% and 4.2% of the stock.

After doing some more digging, we found that the top 2 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. 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 Tianqi Lithium

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.

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.

It seems insiders own a significant proportion of Tianqi Lithium Corporation. It is very interesting to see that insiders have a meaningful CN¥45b stake in this CN¥133b business. Most would be pleased to see the board is investing alongside them. You may wish to access this free chart showing recent trading by insiders.

General Public Ownership

The general public, who are usually individual investors, hold a 19% stake in Tianqi Lithium. 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 25%, of the Tianqi Lithium 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:

It's always worth thinking about the different groups who own shares in a company. But to understand Tianqi Lithium better, we need to consider many other factors. To that end, you should learn about the 2 warning signs we've spotted with Tianqi Lithium (including 1 which can't be ignored) .

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.

Disclaimer: This content is for informational and educational purposes only and does not constitute a recommendation or endorsement of any specific investment or investment strategy. Read more
    Write a comment