Private companies who hold 53% of Zhejiang TongLi Transmission Technology Co., Ltd. (SZSE:301255) gained 10%, insiders profited as well

Key Insights

• Significant control over Zhejiang TongLi Transmission Technology by private companies implies that the general public has more power to influence management and governance-related decisions
• 64% of the business is held by the top 2 shareholders
• 23% of Zhejiang TongLi Transmission Technology is held by insiders

A look at the shareholders of Zhejiang TongLi Transmission Technology Co., Ltd. (SZSE:301255) can tell us which group is most powerful. And the group that holds the biggest piece of the pie are private companies with 53% ownership. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

While private companies were the group that reaped the most benefits after last week’s 10% price gain, insiders also received a 23% cut.

In the chart below, we zoom in on the different ownership groups of Zhejiang TongLi Transmission Technology.

See our latest analysis for Zhejiang TongLi Transmission Technology

What Does The Institutional Ownership Tell Us About Zhejiang TongLi Transmission 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.

Less than 5% of Zhejiang TongLi Transmission Technology is held by institutional investors. This suggests that some funds have the company in their sights, but many have not yet bought shares in it. If the business gets stronger from here, we could see a situation where more institutions are keen to buy. We sometimes see a rising share price when a few big institutions want to buy a certain stock at the same time. The history of earnings and revenue, which you can see below, could be helpful in considering if more institutional investors will want the stock. Of course, there are plenty of other factors to consider, too.

Hedge funds don't have many shares in Zhejiang TongLi Transmission Technology. Tongli Technology Holding Co., Ltd. is currently the company's largest shareholder with 45% of shares outstanding. With 19% and 7.2% of the shares outstanding respectively, Xianzhong Xiang and Wenzhou Tongtu Enterprise Management Consulting Center (Limited Partnership) are the second and third largest shareholders.

After doing some more digging, we found that the top 2 shareholders collectively control more than half of the company's shares, implying that they have considerable power to influence the company's decisions.

While it makes sense to study institutional ownership data for a company, it also makes sense to study analyst sentiments to know which way the wind is blowing. 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 Zhejiang TongLi Transmission Technology

The definition of an insider can differ slightly between different countries, but members of the board of directors always count. 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.

Most consider insider ownership a positive because it can indicate the board is well aligned with other shareholders. However, on some occasions too much power is concentrated within this group.

Our information suggests that insiders maintain a significant holding in Zhejiang TongLi Transmission Technology Co., Ltd.. It has a market capitalization of just CN¥4.0b, and insiders have CN¥908m worth of shares in their own names. 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 22% stake in Zhejiang TongLi Transmission Technology. 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

We can see that Private Companies own 53%, of the shares on issue. 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. For instance, we've identified 3 warning signs for Zhejiang TongLi Transmission Technology (1 doesn't sit too well with us) that you should be aware of.

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.