TCL Zhonghuan Renewable Energy Technology Co.,Ltd.'s (SZSE:002129) last week's 5.0% decline must have disappointed retail investors who have a significant stake

Key Insights

• Significant control over TCL Zhonghuan Renewable Energy TechnologyLtd by retail investors implies that the general public has more power to influence management and governance-related decisions
• A total of 25 investors have a majority stake in the company with 43% ownership
• Institutional ownership in TCL Zhonghuan Renewable Energy TechnologyLtd is 13%

A look at the shareholders of TCL Zhonghuan Renewable Energy Technology Co.,Ltd. (SZSE:002129) can tell us which group is most powerful. We can see that retail investors own the lion's share in the company with 55% ownership. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

And following last week's 5.0% decline in share price, retail investors suffered the most losses.

Let's delve deeper into each type of owner of TCL Zhonghuan Renewable Energy TechnologyLtd, beginning with the chart below.

See our latest analysis for TCL Zhonghuan Renewable Energy TechnologyLtd

What Does The Institutional Ownership Tell Us About TCL Zhonghuan Renewable Energy TechnologyLtd?

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 TCL Zhonghuan Renewable Energy TechnologyLtd. 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 TCL Zhonghuan Renewable Energy TechnologyLtd, (below). Of course, keep in mind that there are other factors to consider, too.

TCL Zhonghuan Renewable Energy TechnologyLtd is not owned by hedge funds. Our data shows that TCL Technology Group Corporation is the largest shareholder with 30% of shares outstanding. In comparison, the second and third largest shareholders hold about 1.8% and 1.0% of the stock.

On studying our ownership data, we found that 25 of the top shareholders collectively own less than 50% of the share register, implying that no single individual has a majority interest.

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

Insider Ownership Of TCL Zhonghuan Renewable Energy TechnologyLtd

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.

Our data suggests that insiders own under 1% of TCL Zhonghuan Renewable Energy Technology Co.,Ltd. in their own names. It is a pretty big company, so it would be possible for board members to own a meaningful interest in the company, without owning much of a proportional interest. In this case, they own around CN¥41m worth of shares (at current prices). Arguably, recent buying and selling is just as important to consider. You can click here to see if insiders have been buying or selling.

General Public Ownership

The general public, mostly comprising of individual investors, collectively holds 55% of TCL Zhonghuan Renewable Energy TechnologyLtd shares. With this amount of ownership, retail investors can collectively play a role in decisions that affect shareholder returns, such as dividend policies and the appointment of directors. They can also exercise the power to vote on acquisitions or mergers that may not improve profitability.

Public Company Ownership

We can see that public companies hold 30% of the TCL Zhonghuan Renewable Energy TechnologyLtd shares on issue. It's hard to say for sure but this suggests they have entwined business interests. This might be a strategic stake, so it's worth watching this space for changes in ownership.

Next Steps:

While it is well worth considering the different groups that own a company, there are other factors that are even more important. Take risks for example - TCL Zhonghuan Renewable Energy TechnologyLtd has 2 warning signs we think you should be aware of.

But ultimately it is the future, not the past, that will determine how well the owners of this business will do. Therefore we think it advisable to take a look at this free report showing whether analysts are predicting a brighter 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.