Private companies are Tongqinglou Catering Co., Ltd.'s (SHSE:605108) biggest owners and were hit after market cap dropped CN¥697m

Key Insights

• Significant control over Tongqinglou Catering by private companies implies that the general public has more power to influence management and governance-related decisions
• The top 2 shareholders own 58% of the company
• Insiders own 24% of Tongqinglou Catering

Every investor in Tongqinglou Catering Co., Ltd. (SHSE:605108) should be aware of the most powerful shareholder groups. The group holding the most number of shares in the company, around 46% to be precise, is private companies. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

Following a 9.7% 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.

See 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.

We can see that Tongqinglou Catering does have institutional investors; and they hold a good portion of the company's stock. This implies the analysts working for those institutions have looked at the stock and they like it. But just like anyone else, they could be wrong. 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 Tongqinglou Catering, (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 Tongqinglou Catering. Maanshan Putian Investment Development Co., Ltd. is currently the largest shareholder, with 38% of shares outstanding. Jishui Shen is the second largest shareholder owning 21% of common stock, and Bank of Communications Schroder Fund Management Co., Ltd. holds about 3.7% of the company 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.

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. Quite a few analysts cover the stock, so you could look into forecast growth quite easily.

Insider Ownership Of Tongqinglou Catering

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.

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 own CN¥1.6b worth of shares in the CN¥6.5b company. 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 17% stake in the company, and hence can't easily be ignored. 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. 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. Like risks, for instance. Every company has them, and we've spotted 3 warning signs for Tongqinglou Catering (of which 1 is significant!) 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.