Retail investors are China Transinfo Technology Co., Ltd's (SZSE:002373) biggest owners and were hit after market cap dropped CN¥456m

Key Insights

• Significant control over China Transinfo Technology by retail investors implies that the general public has more power to influence management and governance-related decisions
• 50% of the business is held by the top 12 shareholders
• Insider ownership in China Transinfo Technology is 17%

To get a sense of who is truly in control of China Transinfo Technology Co., Ltd (SZSE:002373), it is important to understand the ownership structure of the business. With 41% stake, retail investors possess the maximum shares in the company. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

As a result, retail investors as a group endured the highest losses last week after market cap fell by CN¥456m.

In the chart below, we zoom in on the different ownership groups of China Transinfo Technology.

Check out our latest analysis for China Transinfo Technology

What Does The Institutional Ownership Tell Us About China Transinfo Technology?

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.

China Transinfo Technology already has institutions on the share registry. Indeed, they own a respectable stake in the company. This implies the analysts working for those institutions have looked at the stock and they like it. But just like anyone else, they could be wrong. 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 China Transinfo Technology'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 China Transinfo Technology. The company's CEO Shu Dong Xia is the largest shareholder with 15% of shares outstanding. In comparison, the second and third largest shareholders hold about 14% and 5.7% of the stock.

Looking at the shareholder registry, we can see that 50% of the ownership is controlled by the top 12 shareholders, meaning that no single shareholder has a majority interest in the ownership.

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

Insider Ownership Of China Transinfo Technology

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.

It seems insiders own a significant proportion of China Transinfo Technology Co., Ltd. It is very interesting to see that insiders have a meaningful CN¥2.2b stake in this CN¥13b business. 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 41% stake in China Transinfo Technology. 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.

Private Company Ownership

It seems that Private Companies own 25%, of the China Transinfo Technology stock. It's hard to draw any conclusions from this fact alone, so its worth looking into who owns those private companies. Sometimes insiders or other related parties have an interest in shares in a public company through a separate private company.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand China Transinfo Technology better, we need to consider many other factors. Take risks for example - China Transinfo Technology has 1 warning sign 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.