Individual investors invested in Tianrun Industry Technology Co., Ltd. (SZSE:002283) up 9.2% last week, insiders too were rewarded

Key Insights

• The considerable ownership by individual investors in Tianrun Industry Technology indicates that they collectively have a greater say in management and business strategy
• The top 18 shareholders own 50% of the company
• Insiders own 25% of Tianrun Industry Technology

To get a sense of who is truly in control of Tianrun Industry Technology Co., Ltd. (SZSE:002283), it is important to understand the ownership structure of the business. With 48% stake, individual investors possess the maximum shares in the company. Put another way, the group faces the maximum upside potential (or downside risk).

While individual investors were the group that reaped the most benefits after last week’s 9.2% price gain, insiders also received a 25% cut.

Let's delve deeper into each type of owner of Tianrun Industry Technology, beginning with the chart below.

View our latest analysis for Tianrun Industry Technology

What Does The Institutional Ownership Tell Us About Tianrun Industry Technology?

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.

As you can see, institutional investors have a fair amount of stake in Tianrun Industry Technology. 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. 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 Tianrun Industry Technology's historic earnings and revenue below, but keep in mind there's always more to the story.

Tianrun Industry Technology is not owned by hedge funds. Shandong Crankshaft Factory Co., Ltd. is currently the company's largest shareholder with 15% of shares outstanding. In comparison, the second and third largest shareholders hold about 12% and 4.1% of the stock. In addition, we found that Chengfei Xu, the CEO has 1.0% of the shares allocated to their name.

A closer look at our ownership figures suggests that the top 18 shareholders have a combined ownership of 50% implying that 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. While there is some analyst coverage, the company is probably not widely covered. So it could gain more attention, down the track.

Insider Ownership Of Tianrun Industry Technology

The definition of an insider can differ slightly between different countries, but members of the board of directors always count. Management ultimately answers to the board. However, it is not uncommon for managers to be executive board members, especially if they are a founder or the CEO.

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.

It seems insiders own a significant proportion of Tianrun Industry Technology Co., Ltd.. It has a market capitalization of just CN¥5.0b, and insiders have CN¥1.2b worth of shares in their own names. 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

The general public-- including retail investors -- own 48% stake in the company, and hence can't easily be ignored. This size of ownership, while considerable, may not be enough to change company policy if the decision is not in sync with other large shareholders.

Private Company Ownership

We can see that Private Companies own 15%, of the shares on issue. It's hard to draw any conclusions from this fact alone, so its worth looking into who owns those private companies. Sometimes insiders or other related parties have an interest in shares in a public company through a separate private company.

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. For instance, we've identified 1 warning sign for Tianrun Industry Technology that you should be aware of.

Ultimately the future is most important. You can access this free report on analyst forecasts for the company.

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.