Zhejiang Tiancheng Controls Co., Ltd.'s (SHSE:603085) market cap surged CN¥548m last week, private companies who have a lot riding on the company were rewarded

Key Insights

• The considerable ownership by private companies in Zhejiang Tiancheng Controls indicates that they collectively have a greater say in management and business strategy
• A total of 4 investors have a majority stake in the company with 54% ownership
• Institutions own 14% of Zhejiang Tiancheng Controls

If you want to know who really controls Zhejiang Tiancheng Controls Co., Ltd. (SHSE:603085), then you'll have to look at the makeup of its share registry. The group holding the most number of shares in the company, around 43% to be precise, is private companies. Put another way, the group faces the maximum upside potential (or downside risk).

Clearly, private companies benefitted the most after the company's market cap rose by CN¥548m last week.

Let's delve deeper into each type of owner of Zhejiang Tiancheng Controls, beginning with the chart below.

See our latest analysis for Zhejiang Tiancheng Controls

What Does The Institutional Ownership Tell Us About Zhejiang Tiancheng Controls?

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.

Zhejiang Tiancheng Controls already has institutions on the share registry. Indeed, they own a respectable stake in the company. This can indicate that the company has a certain degree of credibility in the investment community. However, it is best to be wary of relying on the supposed validation that comes with institutional investors. They too, get it wrong sometimes. 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 Zhejiang Tiancheng Controls' earnings history below. Of course, the future is what really matters.

Hedge funds don't have many shares in Zhejiang Tiancheng Controls. The company's largest shareholder is Zhejiang Tiancheng Tech-Investment Co., Ltd., with ownership of 40%. Meanwhile, the second and third largest shareholders, hold 5.0% and 4.6%, of the shares outstanding, respectively.

To make our study more interesting, we found that the top 4 shareholders control more than half of the company which implies that this group has considerable sway over the company's decision-making.

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 is a little analyst coverage of the stock, but not much. So there is room for it to gain more coverage.

Insider Ownership Of Zhejiang Tiancheng Controls

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.

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 Zhejiang Tiancheng Controls Co., Ltd.. In their own names, insiders own CN¥236m worth of stock in the CN¥4.7b 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 37% stake in Zhejiang Tiancheng Controls. 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

Our data indicates that Private Companies hold 43%, of the company's shares. 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. To that end, you should be aware of the 1 warning sign we've spotted with Zhejiang Tiancheng Controls .

If you are like me, you may want to think about whether this company will grow or shrink. Luckily, you can check this free report showing analyst forecasts for its 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.

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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.