The recent CN¥308m market cap decrease is likely to have disappointed insiders invested in Shijiazhuang Tonhe Electronics Technologies Co.,Ltd. (SZSE:300491)

Key Insights

• Insiders appear to have a vested interest in Shijiazhuang Tonhe Electronics TechnologiesLtd's growth, as seen by their sizeable ownership
• 50% of the business is held by the top 12 shareholders
• 10% of Shijiazhuang Tonhe Electronics TechnologiesLtd is held by Institutions

If you want to know who really controls Shijiazhuang Tonhe Electronics Technologies Co.,Ltd. (SZSE:300491), then you'll have to look at the makeup of its share registry. We can see that individual insiders own the lion's share in the company with 45% ownership. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

And following last week's 11% decline in share price, insiders suffered the most losses.

Let's delve deeper into each type of owner of Shijiazhuang Tonhe Electronics TechnologiesLtd, beginning with the chart below.

See our latest analysis for Shijiazhuang Tonhe Electronics TechnologiesLtd

What Does The Institutional Ownership Tell Us About Shijiazhuang Tonhe Electronics TechnologiesLtd?

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.

As you can see, institutional investors have a fair amount of stake in Shijiazhuang Tonhe Electronics TechnologiesLtd. 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. It is not uncommon to see a big share price drop if two large institutional investors try to sell out of a stock at the same time. So it is worth checking the past earnings trajectory of Shijiazhuang Tonhe Electronics TechnologiesLtd, (below). Of course, keep in mind that there are other factors to consider, too.

We note that hedge funds don't have a meaningful investment in Shijiazhuang Tonhe Electronics TechnologiesLtd. Looking at our data, we can see that the largest shareholder is Tong Jia with 15% of shares outstanding. Meanwhile, the second and third largest shareholders, hold 14% and 4.5%, of the shares outstanding, respectively.

After doing some more digging, we found that the top 12 have the combined ownership of 50% in the company, suggesting that no single shareholder has significant control over the company.

While studying institutional ownership for a company can add value to your research, it is also a good practice to research analyst recommendations to get a deeper understand of a stock's expected performance. Quite a few analysts cover the stock, so you could look into forecast growth quite easily.

Insider Ownership Of Shijiazhuang Tonhe Electronics TechnologiesLtd

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.

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 Shijiazhuang Tonhe Electronics Technologies Co.,Ltd.. Insiders have a CN¥1.1b stake in this CN¥2.4b business. We would say this shows alignment with shareholders, but it is worth noting that the company is still quite small; some insiders may have founded the business. You can click here to see if those insiders have been buying or selling.

General Public Ownership

The general public-- including retail investors -- own 44% stake in the company, and hence can't easily be ignored. 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.

Next Steps:

While it is well worth considering the different groups that own a company, there are other factors that are even more important. Take risks for example - Shijiazhuang Tonhe Electronics TechnologiesLtd has 2 warning signs (and 1 which doesn't sit too well with us) we think you should know about.

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com