Key Insights
- Jiangsu Tongrun Equipment TechnologyLtd's significant private companies ownership suggests that the key decisions are influenced by shareholders from the larger public
- The top 3 shareholders own 54% of the company
- Using data from company's past performance alongside ownership research, one can better assess the future performance of a company
A look at the shareholders of Jiangsu Tongrun Equipment Technology Co.,Ltd (SZSE:002150) can tell us which group is most powerful. And the group that holds the biggest piece of the pie are private companies with 42% ownership. In other words, the group stands to gain the most (or lose the most) from their investment into the company.
As a result, private companies collectively scored the highest last week as the company hit CN¥5.6b market cap following a 8.7% gain in the stock.
In the chart below, we zoom in on the different ownership groups of Jiangsu Tongrun Equipment TechnologyLtd.
What Does The Institutional Ownership Tell Us About Jiangsu Tongrun Equipment TechnologyLtd?
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 Jiangsu Tongrun Equipment TechnologyLtd 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 Jiangsu Tongrun Equipment TechnologyLtd's historic earnings and revenue below, but keep in mind there's always more to the story.
We note that hedge funds don't have a meaningful investment in Jiangsu Tongrun Equipment TechnologyLtd. Our data shows that Zhejiang Chint Electrics Co., Ltd. is the largest shareholder with 25% of shares outstanding. Torin Jacks Inc. is the second largest shareholder owning 16% of common stock, and Changshu Hoisting Jack Factory holds about 13% of the company stock.
A more detailed study of the shareholder registry showed us that 3 of the top shareholders have a considerable amount of ownership in the company, via their 54% stake.
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. 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 Jiangsu Tongrun Equipment TechnologyLtd
The definition of an insider can differ slightly between different countries, but members of the board of directors always count. The company management answer to the board and the latter should represent the interests of shareholders. Notably, sometimes top-level managers are on the board themselves.
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.
We can report that insiders do own shares in Jiangsu Tongrun Equipment Technology Co.,Ltd. In their own names, insiders own CN¥95m worth of stock in the CN¥5.6b company. 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 23% stake in Jiangsu Tongrun Equipment TechnologyLtd. While this size of ownership may not be enough to sway a policy decision in their favour, they can still make a collective impact on company policies.
Private Company Ownership
It seems that Private Companies own 42%, of the Jiangsu Tongrun Equipment TechnologyLtd 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.
Public Company Ownership
We can see that public companies hold 25% of the Jiangsu Tongrun Equipment TechnologyLtd shares on issue. We can't be certain but it is quite possible this is a strategic stake. The businesses may be similar, or work together.
Next Steps:
It's always worth thinking about the different groups who own shares in a company. But to understand Jiangsu Tongrun Equipment TechnologyLtd better, we need to consider many other factors. Consider for instance, the ever-present spectre of investment risk. We've identified 3 warning signs with Jiangsu Tongrun Equipment TechnologyLtd (at least 1 which is significant) , and understanding them should be part of your investment process.
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.
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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.