Private companies are Tongqinglou Catering Co., Ltd.'s (SHSE:605108) biggest owners and were hit after market cap dropped CN¥541m

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

If you want to know who really controls Tongqinglou Catering Co., Ltd. (SHSE:605108), then you'll have to look at the makeup of its share registry. We can see that private companies own the lion's share in the company with 46% ownership. Put another way, the group faces the maximum upside potential (or downside risk).

While insiders who own 24% came under pressure after market cap dropped to CN¥6.1b last week,private companies took the most losses.

Let's take a closer look to see what the different types of shareholders can tell us about Tongqinglou Catering.

See our latest analysis for Tongqinglou Catering

What Does The Institutional Ownership Tell Us About Tongqinglou Catering?

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.

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. If multiple institutions change their view on a stock at the same time, you could see the share price drop fast. It's therefore worth looking at Tongqinglou Catering's earnings history below. Of course, the future is what really matters.

Tongqinglou Catering is not owned by hedge funds. The company's largest shareholder is Maanshan Putian Investment Development Co., Ltd., with ownership of 38%. 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.

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.

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.

Our information suggests that insiders maintain a significant holding in Tongqinglou Catering Co., Ltd.. Insiders own CN¥1.5b worth of shares in the CN¥6.1b company. 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 15% stake in Tongqinglou Catering. This size of ownership, while considerable, may not be enough to change company policy if the decision is not in sync with other large shareholders.

Private Company Ownership

We can see that Private Companies own 46%, of the shares on issue. 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:

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. For example, we've discovered 2 warning signs for Tongqinglou Catering (1 is a bit unpleasant!) that you should be aware of before investing here.

Ultimately the future is most important. You can access this free report on analyst forecasts for the company.

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.