Key Insights
- Tongding Interconnection Information's significant retail investors ownership suggests that the key decisions are influenced by shareholders from the larger public
- 46% of the business is held by the top 18 shareholders
- Ownership research, combined with past performance data can help provide a good understanding of opportunities in a stock
Every investor in Tongding Interconnection Information Co., Ltd. (SZSE:002491) should be aware of the most powerful shareholder groups. And the group that holds the biggest piece of the pie are retail investors with 54% ownership. In other words, the group stands to gain the most (or lose the most) from their investment into the company.
And following last week's 5.2% decline in share price, retail investors suffered the most losses.
Let's take a closer look to see what the different types of shareholders can tell us about Tongding Interconnection Information.
See our latest analysis for Tongding Interconnection Information
What Does The Institutional Ownership Tell Us About Tongding Interconnection Information?
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.
Institutions have a very small stake in Tongding Interconnection Information. That indicates that the company is on the radar of some funds, but it isn't particularly popular with professional investors at the moment. So if the company itself can improve over time, we may well see more institutional buyers in the future. When multiple institutional investors want to buy shares, we often see a rising share price. The past revenue trajectory (shown below) can be an indication of future growth, but there are no guarantees.
Tongding Interconnection Information is not owned by hedge funds. Looking at our data, we can see that the largest shareholder is TongDing Group Co., Ltd. with 32% of shares outstanding. In comparison, the second and third largest shareholders hold about 7.1% and 4.6% of the stock. Xiaoping Shen, who is the third-largest shareholder, also happens to hold the title of Chairman of the Board.
A deeper look at our ownership data shows that the top 18 shareholders collectively hold less than half of the register, suggesting a large group of small holders where no single shareholder has a majority.
Researching institutional ownership is a good way to gauge and filter a stock's expected performance. The same can be achieved by studying analyst sentiments. 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 Tongding Interconnection Information
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.
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.
Our most recent data indicates that insiders own some shares in Tongding Interconnection Information Co., Ltd.. It has a market capitalization of just CN¥6.5b, and insiders have CN¥384m worth of shares, in their own names. It is good to see some investment by insiders, but it might be worth checking if those insiders have been buying.
General Public Ownership
The general public, mostly comprising of individual investors, collectively holds 54% of Tongding Interconnection Information shares. This size of ownership gives investors from the general public some collective power. They can and probably do influence decisions on executive compensation, dividend policies and proposed business acquisitions.
Private Equity Ownership
With a stake of 7.1%, private equity firms could influence the Tongding Interconnection Information board. 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
It seems that Private Companies own 32%, of the Tongding Interconnection Information stock. 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:
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. To that end, you should be aware of the 1 warning sign we've spotted with Tongding Interconnection Information .
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.
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.