Tofflon Science and Technology Group Co., Ltd.'s (SZSE:300171) stock price dropped 4.1% last week; individual investors would not be happy

Key Insights

• The considerable ownership by individual investors in Tofflon Science and Technology Group indicates that they collectively have a greater say in management and business strategy
• The top 11 shareholders own 50% of the company
• Insiders own 36% 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 investors own the lion's share in the company with 47% ownership. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

While insiders who own 36% came under pressure after market cap dropped to CN¥9.6b last week,individual investors took the most losses.

Let's take a closer look to see what the different types of shareholders can tell us about Tofflon Science and Technology Group.

View our latest analysis for Tofflon Science and Technology Group

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

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 Tofflon Science and Technology Group does have institutional investors; and they hold a good portion of the company's stock. 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. 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 Tofflon Science and Technology Group, (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 Tofflon Science and Technology Group. With a 34% stake, CEO Xiaodong Zheng is the largest shareholder. The second and third largest shareholders are CS Capital Co., Ltd. and Shanghai Biomedical Industry Equity Fund Management Co., Ltd., with an equal amount of shares to their name at 3.2%.

Looking at the shareholder registry, we can see that 50% of the ownership is controlled by the top 11 shareholders, meaning that no single shareholder has a majority interest in the ownership.

While studying institutional ownership for a company can add value to your research, it is also a good practice to research analyst recommendations to get a deeper understand of a stock's expected performance. 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

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.

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 most recent data indicates that insiders own a reasonable proportion of Tofflon Science and Technology Group Co., Ltd.. It is very interesting to see that insiders have a meaningful CN¥3.4b stake in this CN¥9.6b business. Most would say this shows a good degree of alignment with shareholders, especially in a company of this size. You can click here to see if those insiders have been buying or selling.

General Public Ownership

The general public-- including retail investors -- own 47% stake in the company, and hence can't easily be ignored. While this size of ownership may not be enough to sway a policy decision in their favour, they can still make a collective impact on company policies.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand Tofflon Science and Technology Group better, we need to consider many other factors. For instance, we've identified 3 warning signs for Tofflon Science and Technology Group (1 can't be ignored) that you should be aware of.

If you are like me, you may want to think about whether this company will grow or shrink. Luckily, you can check this free report showing analyst forecasts for its future.

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.