Zhendong Chen TJK Intelligent Equipment Manufacturing (Tianjin) Co., Ltd.'s (SZSE:300823) CEO is the most bullish insider, and their stock value gained 16%last week

Key Insights

• Insiders appear to have a vested interest in TJK Intelligent Equipment Manufacturing (Tianjin)'s growth, as seen by their sizeable ownership
• A total of 3 investors have a majority stake in the company with 54% ownership
• Past performance of a company along with ownership data serve to give a strong idea about prospects for a business

To get a sense of who is truly in control of TJK Intelligent Equipment Manufacturing (Tianjin) Co., Ltd. (SZSE:300823), it is important to understand the ownership structure of the business. The group holding the most number of shares in the company, around 54% to be precise, is individual insiders. Put another way, the group faces the maximum upside potential (or downside risk).

Clearly, insiders benefitted the most after the company's market cap rose by CN¥296m last week.

In the chart below, we zoom in on the different ownership groups of TJK Intelligent Equipment Manufacturing (Tianjin).

View our latest analysis for TJK Intelligent Equipment Manufacturing (Tianjin)

What Does The Institutional Ownership Tell Us About TJK Intelligent Equipment Manufacturing (Tianjin)?

Many institutions measure their performance against an index that approximates the local market. So they usually pay more attention to companies that are included in major indices.

We can see that TJK Intelligent Equipment Manufacturing (Tianjin) does have institutional investors; and they hold a good portion of the company's stock. 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 TJK Intelligent Equipment Manufacturing (Tianjin)'s historic earnings and revenue below, but keep in mind there's always more to the story.

TJK Intelligent Equipment Manufacturing (Tianjin) is not owned by hedge funds. Looking at our data, we can see that the largest shareholder is the CEO Zhendong Chen with 39% of shares outstanding. Zhenhua Chen is the second largest shareholder owning 8.3% of common stock, and Zhensheng Chen holds about 6.6% of the company stock. Interestingly, the third-largest shareholder, Zhensheng Chen is also a Member of the Board of Directors, again, indicating strong insider ownership amongst the company's top shareholders.

After doing some more digging, we found that the top 3 shareholders collectively control more than half of the company's shares, implying that they have considerable power to influence the company's decisions.

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. We're not picking up on any analyst coverage of the stock at the moment, so the company is unlikely to be widely held.

Insider Ownership Of TJK Intelligent Equipment Manufacturing (Tianjin)

While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. 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.

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 most recent data indicates that insiders own the majority of TJK Intelligent Equipment Manufacturing (Tianjin) Co., Ltd.. This means they can collectively make decisions for the company. So they have a CN¥1.1b stake in this CN¥2.1b business. Most would argue this is a positive, showing strong alignment with shareholders. You can click here to see if those insiders have been buying or selling.

General Public Ownership

With a 37% ownership, the general public, mostly comprising of individual investors, have some degree of sway over TJK Intelligent Equipment Manufacturing (Tianjin). 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 3.4%, 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:

It's always worth thinking about the different groups who own shares in a company. But to understand TJK Intelligent Equipment Manufacturing (Tianjin) better, we need to consider many other factors. For example, we've discovered 3 warning signs for TJK Intelligent Equipment Manufacturing (Tianjin) (2 make us uncomfortable!) that you should be aware of before investing here.

Of course this may not be the best stock to buy. So take a peek at this free free list of interesting companies.

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.