Private companies among Tongqinglou Catering Co., Ltd.'s (SHSE:605108) largest stockholders and were hit after last week's 7.4% price drop

Key Insights

• The considerable ownership by private companies in Tongqinglou Catering indicates that they collectively have a greater say in management and business strategy
• The top 2 shareholders own 58% of the company
• Insiders own 24% of Tongqinglou Catering

To get a sense of who is truly in control of Tongqinglou Catering Co., Ltd. (SHSE:605108), it is important to understand the ownership structure of the business. We can see that private companies own the lion's share in the company with 46% ownership. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

Following a 7.4% decrease in the stock price last week, private companies suffered the most losses, but insiders who own 24% stock also took a hit.

Let's delve deeper into each type of owner of Tongqinglou Catering, beginning with the chart below.

View our latest analysis for Tongqinglou Catering

What Does The Institutional Ownership Tell Us About Tongqinglou Catering?

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.

As you can see, institutional investors have a fair amount of stake in Tongqinglou Catering. This can indicate that the company has a certain degree of credibility in the investment community. However, it is best to be wary of relying on the supposed validation that comes with institutional investors. They too, get it wrong sometimes. 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 Tongqinglou Catering's historic earnings and revenue below, but keep in mind there's always more to the story.

We note that hedge funds don't have a meaningful investment in Tongqinglou Catering. Our data shows that Maanshan Putian Investment Development Co., Ltd. is the largest shareholder with 38% of shares outstanding. In comparison, the second and third largest shareholders hold about 21% and 3.7% of the stock.

A more detailed study of the shareholder registry showed us that 2 of the top shareholders have a considerable amount of ownership in the company, via their 58% stake.

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. There are plenty of analysts covering the stock, so it might be worth seeing what they are forecasting, too.

Insider Ownership Of Tongqinglou Catering

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. 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 Tongqinglou Catering Co., Ltd.. Insiders have a CN¥1.3b stake in this CN¥5.4b 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, who are usually individual investors, hold a 18% stake in Tongqinglou Catering. 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

It seems that Private Companies own 46%, of the Tongqinglou Catering stock. 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 Tongqinglou Catering better, we need to consider many other factors. Take risks for example - Tongqinglou Catering has 3 warning signs (and 1 which is a bit unpleasant) 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.