After losing 44% in the past year, Transwarp Technology (Shanghai) Co.,Ltd. (SHSE:688031) institutional owners must be relieved by the recent gain

Key Insights

• Institutions' substantial holdings in Transwarp Technology (Shanghai)Ltd implies that they have significant influence over the company's share price
• The top 10 shareholders own 52% of the company
• Insider ownership in Transwarp Technology (Shanghai)Ltd is 16%

To get a sense of who is truly in control of Transwarp Technology (Shanghai) Co.,Ltd. (SHSE:688031), it is important to understand the ownership structure of the business. We can see that institutions own the lion's share in the company with 32% ownership. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

After a year of 44% losses, last week’s 18% gain would be welcomed by institutional investors as a possible sign that returns might start trending higher.

Let's delve deeper into each type of owner of Transwarp Technology (Shanghai)Ltd, beginning with the chart below.

See our latest analysis for Transwarp Technology (Shanghai)Ltd

What Does The Institutional Ownership Tell Us About Transwarp Technology (Shanghai)Ltd?

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 Transwarp Technology (Shanghai)Ltd does have institutional investors; and they hold a good portion of the company's stock. This can indicate that the company has a certain degree of credibility in the investment community. However, it is best to be wary of relying on the supposed validation that comes with institutional investors. They too, get it wrong sometimes. 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 Transwarp Technology (Shanghai)Ltd's earnings history below. Of course, the future is what really matters.

Transwarp Technology (Shanghai)Ltd is not owned by hedge funds. The company's CEO Yuanhao Sun is the largest shareholder with 9.2% of shares outstanding. Linzhi Lichuang Information Technology Co., Ltd. is the second largest shareholder owning 8.8% of common stock, and Shanghai Zanxing Investment Center (Limited Partnership) holds about 6.2% of the company stock.

We did some more digging and found that 10 of the top shareholders account for roughly 52% of the register, implying that along with larger shareholders, there are a few smaller shareholders, thereby balancing out each others interests somewhat.

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 are plenty of analysts covering the stock, so it might be worth seeing what they are forecasting, too.

Insider Ownership Of Transwarp Technology (Shanghai)Ltd

While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. Company management run the business, but the CEO will answer to the board, even if he or she is a member of it.

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 Transwarp Technology (Shanghai) Co.,Ltd.. It has a market capitalization of just CN¥7.7b, and insiders have CN¥1.2b worth of shares in their own names. That's quite significant. It is good to see this level of investment. 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 25% stake in Transwarp Technology (Shanghai)Ltd. 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 Equity Ownership

Private equity firms hold a 5.6% stake in Transwarp Technology (Shanghai)Ltd. This suggests they can be influential in key policy decisions. Sometimes we see private equity stick around for the long term, but generally speaking they have a shorter investment horizon and -- as the name suggests -- don't invest in public companies much. After some time they may look to sell and redeploy capital elsewhere.

Private Company Ownership

We can see that Private Companies own 22%, of the shares on issue. It might be worth looking deeper into this. If related parties, such as insiders, have an interest in one of these private companies, that should be disclosed in the annual report. Private companies may also have a strategic interest in the company.

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. Consider risks, for instance. Every company has them, and we've spotted 1 warning sign for Transwarp Technology (Shanghai)Ltd you should know about.

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.