Recent Uptick Might Appease Transwarp Technology (Shanghai) Co.,Ltd. (SHSE:688031) Institutional Owners After Losing 45% Over the Past Year

Simply Wall St ·  Feb 22 17:03

Key Insights

  • Institutions' substantial holdings in Transwarp Technology (Shanghai)Ltd implies that they have significant influence over the company's share price
  • A total of 10 investors have a majority stake in the company with 52% ownership
  • 16% of Transwarp Technology (Shanghai)Ltd is held by insiders

To get a sense of who is truly in control of Transwarp Technology (Shanghai) Co.,Ltd. (SHSE:688031), it is important to understand the ownership structure of the business. With 32% stake, institutions 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).

Institutional investors would probably welcome last week's 12% increase in the share price after a year of 45% losses as a sign that returns may to begin trending higher.

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

SHSE:688031 Ownership Breakdown February 22nd 2024

What Does The Institutional Ownership Tell Us About Transwarp Technology (Shanghai)Ltd?

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 Transwarp Technology (Shanghai)Ltd 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. If multiple institutions change their view on a stock at the same time, you could see the share price drop fast. It's therefore worth looking at Transwarp Technology (Shanghai)Ltd's earnings history below. Of course, the future is what really matters.

SHSE:688031 Earnings and Revenue Growth February 22nd 2024

Hedge funds don't have many shares in Transwarp Technology (Shanghai)Ltd. The company's CEO Yuanhao Sun is the largest shareholder with 9.2% of shares outstanding. With 8.8% and 6.2% of the shares outstanding respectively, Linzhi Lichuang Information Technology Co., Ltd. and Shanghai Zanxing Investment Center (Limited Partnership) are the second and third largest shareholders.

On further inspection, we found that more than half the company's shares are owned by the top 10 shareholders, suggesting that the interests of the larger shareholders are balanced out to an extent by the smaller ones.

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. There are plenty of analysts covering the stock, so it might be worth seeing what they are forecasting, too.

Insider Ownership Of Transwarp Technology (Shanghai)Ltd

While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. Company management run the business, but the CEO will answer to the board, even if he or she is a member of it.

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 Transwarp Technology (Shanghai) Co.,Ltd.. Insiders have a CN¥863m stake in this CN¥5.6b business. This may suggest that the founders still own a lot of shares. You can click here to see if they have been buying or selling.

General Public Ownership

With a 25% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Transwarp Technology (Shanghai)Ltd. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.

Private Equity Ownership

Private equity firms hold a 5.6% stake in Transwarp Technology (Shanghai)Ltd. This suggests they can be influential in key policy decisions. 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 22%, of the shares on issue. 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:

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 2 warning signs for Transwarp Technology (Shanghai)Ltd you should be aware of, and 1 of them is a bit unpleasant.

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.

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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.

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