After the recent decline, Tofflon Science and Technology Group Co., Ltd. (SZSE:300171) CEO Xiaodong Zheng's holdings have lost 8.8% of their value

Key Insights

• Significant insider control over Tofflon Science and Technology Group implies vested interests in company growth
• 51% of the company is held by a single shareholder (Xiaodong Zheng)
• Institutions own 18% of Tofflon Science and Technology Group

If you want to know who really controls Tofflon Science and Technology Group Co., Ltd. (SZSE:300171), then you'll have to look at the makeup of its share registry. We can see that individual insiders own the lion's share in the company with 52% ownership. Put another way, the group faces the maximum upside potential (or downside risk).

And last week, insiders endured the biggest losses as the stock fell by 8.8%.

In the chart below, we zoom in on the different ownership groups of Tofflon Science and Technology Group.

See our latest analysis for Tofflon Science and Technology Group

What Does The Institutional Ownership Tell Us About Tofflon Science and Technology Group?

Institutions typically measure themselves against a benchmark when reporting to their own investors, so they often become more enthusiastic about a stock once it's included in a major index. We would expect most companies to have some institutions on the register, especially if they are growing.

Tofflon Science and Technology Group already has institutions on the share registry. Indeed, they own a respectable stake in the company. 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 Tofflon Science and Technology Group's historic earnings and revenue below, but keep in mind there's always more to the story.

Hedge funds don't have many shares in Tofflon Science and Technology Group. Looking at our data, we can see that the largest shareholder is the CEO Xiaodong Zheng with 51% of shares outstanding. This essentially means that they have significant control over the outcome or future of the company, which is why insider ownership is usually looked upon favourably by prospective buyers. The second and third largest shareholders are Shanghai Biomedical Industry Equity Fund Management Co., Ltd. and CS Capital Co., Ltd., with an equal amount of shares to their name at 3.2%.

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 is some analyst coverage of the stock, but it could still become more well known, with time.

Insider Ownership Of Tofflon Science and Technology Group

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.

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 that insiders own more than half the Tofflon Science and Technology Group Co., Ltd. stock. This gives them a lot of power. Insiders own CN¥4.0b worth of shares in the CN¥7.7b company. That's extraordinary! It is good to see this level of investment. You can check here to see if those insiders have been selling any of their shares.

General Public Ownership

With a 30% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Tofflon Science and Technology Group. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.

Next Steps:

While it is well worth considering the different groups that own a company, there are other factors that are even more important. To that end, you should learn about the 3 warning signs we've spotted with Tofflon Science and Technology Group (including 1 which doesn't sit too well with us) .

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.