Private companies own 37% of Tongkun Group Co., Ltd. (SHSE:601233) shares but individual investors control 41% of the company

Key Insights

• The considerable ownership by individual investors in Tongkun Group indicates that they collectively have a greater say in management and business strategy
• The top 12 shareholders own 50% of the company
• Institutional ownership in Tongkun Group is 18%

Every investor in Tongkun Group Co., Ltd. (SHSE:601233) should be aware of the most powerful shareholder groups. The group holding the most number of shares in the company, around 41% to be precise, is individual investors. Put another way, the group faces the maximum upside potential (or downside risk).

And private companies on the other hand have a 37% ownership in the company.

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

Check out our latest analysis for Tongkun Group

What Does The Institutional Ownership Tell Us About Tongkun 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.

As you can see, institutional investors have a fair amount of stake in Tongkun Group. 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 Tongkun 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 Tongkun Group. Tongkun Holding Group Co., Ltd is currently the company's largest shareholder with 19% of shares outstanding. With 9.4% and 6.2% of the shares outstanding respectively, Jiaxing Shenglong Investment Co., Ltd. and Zhejiang Leixin Industry Co.,Ltd. are the second and third largest shareholders.

A closer look at our ownership figures suggests that the top 12 shareholders have a combined ownership of 50% implying that no single shareholder has a majority.

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

Insider Ownership Of Tongkun 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. Company management run the business, but the CEO will answer to the board, even if he or she is a member of it.

Insider ownership is positive when it signals leadership are thinking like the true owners of the company. However, high insider ownership can also give immense power to a small group within the company. This can be negative in some circumstances.

Our most recent data indicates that insiders own some shares in Tongkun Group Co., Ltd.. This is a big company, so it is good to see this level of alignment. Insiders own CN¥1.3b worth of shares (at current prices). It is good to see this level of investment by insiders. You can check here to see if those insiders have been buying recently.

General Public Ownership

The general public, who are usually individual investors, hold a 41% stake in Tongkun Group. 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 37%, 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:

While it is well worth considering the different groups that own a company, there are other factors that are even more important. Case in point: We've spotted 2 warning signs for Tongkun Group you should be aware of, and 1 of them can't be ignored.

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.