Private companies are Thinker Agricultural Machinery Co., Ltd.'s (SHSE:603789) biggest owners and were hit after market cap dropped CN¥226m

Key Insights

• Significant control over Thinker Agricultural Machinery by private companies implies that the general public has more power to influence management and governance-related decisions
• The top 4 shareholders own 50% of the company
• Insiders own 18% of Thinker Agricultural Machinery

A look at the shareholders of Thinker Agricultural Machinery Co., Ltd. (SHSE:603789) can tell us which group is most powerful. We can see that private companies own the lion's share in the company with 44% ownership. Put another way, the group faces the maximum upside potential (or downside risk).

And last week, private companies endured the biggest losses as the stock fell by 12%.

Let's take a closer look to see what the different types of shareholders can tell us about Thinker Agricultural Machinery.

See our latest analysis for Thinker Agricultural Machinery

What Does The Lack Of Institutional Ownership Tell Us About Thinker Agricultural Machinery?

Small companies that are not very actively traded often lack institutional investors, but it's less common to see large companies without them.

There are multiple explanations for why institutions don't own a stock. The most common is that the company is too small relative to funds under management, so the institution does not bother to look closely at the company. It is also possible that fund managers don't own the stock because they aren't convinced it will perform well. Thinker Agricultural Machinery's earnings and revenue track record (below) may not be compelling to institutional investors -- or they simply might not have looked at the business closely.

Thinker Agricultural Machinery is not owned by hedge funds. Huzhou Xinjiayuan Investment Management Co., Ltd. is currently the largest shareholder, with 18% of shares outstanding. For context, the second largest shareholder holds about 17% of the shares outstanding, followed by an ownership of 9.1% by the third-largest shareholder. Shenqiang Zhang, who is the third-largest shareholder, also happens to hold the title of Member of the Board of Directors. In addition, we found that Zheng Bin, the CEO has 1.0% of the shares allocated to their name.

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. Our information suggests that there isn't any analyst coverage of the stock, so it is probably little known.

Insider Ownership Of Thinker Agricultural Machinery

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.

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 Thinker Agricultural Machinery Co., Ltd.. Insiders have a CN¥311m stake in this CN¥1.7b business. It is great to see insiders so invested in the business. It might be worth checking if those insiders have been buying recently.

General Public Ownership

The general public, who are usually individual investors, hold a 37% stake in Thinker Agricultural Machinery. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.

Private Company Ownership

Our data indicates that Private Companies hold 44%, of the company's shares. 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. Consider for instance, the ever-present spectre of investment risk. We've identified 3 warning signs with Thinker Agricultural Machinery (at least 2 which are concerning) , and understanding them should be part of your investment process.

If you would prefer check out another company -- one with potentially superior financials -- then do not miss this free list of interesting companies, backed by strong financial data.

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.