Private companies in Tian Jin Bohai Chemical Co.,Ltd. (SHSE:600800) are its biggest bettors, and their bets paid off as stock gained 12% last week

Key Insights

• Tian Jin Bohai ChemicalLtd's significant private companies ownership suggests that the key decisions are influenced by shareholders from the larger public
• The top 5 shareholders own 54% of the company
• Using data from company's past performance alongside ownership research, one can better assess the future performance of a company

To get a sense of who is truly in control of Tian Jin Bohai Chemical Co.,Ltd. (SHSE:600800), it is important to understand the ownership structure of the business. With 50% stake, private companies 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).

Clearly, private companies benefitted the most after the company's market cap rose by CN¥266m last week.

In the chart below, we zoom in on the different ownership groups of Tian Jin Bohai ChemicalLtd.

See our latest analysis for Tian Jin Bohai ChemicalLtd

What Does The Institutional Ownership Tell Us About Tian Jin Bohai ChemicalLtd?

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.

As you can see, institutional investors have a fair amount of stake in Tian Jin Bohai ChemicalLtd. 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. 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 Tian Jin Bohai ChemicalLtd's historic earnings and revenue below, but keep in mind there's always more to the story.

Tian Jin Bohai ChemicalLtd is not owned by hedge funds. Our data shows that Tianjin State-Owned Capital Investment Operation Co., Ltd. is the largest shareholder with 28% of shares outstanding. With 9.5% and 6.0% of the shares outstanding respectively, TianJin Global Megcard Group Co., Ltd. and Tianjin Financial Investment Service Group Co., Ltd., Asset Management Arm are the second and third largest shareholders.

To make our study more interesting, we found that the top 5 shareholders control more than half of the company which implies that this group has considerable sway over the company's decision-making.

While it makes sense to study institutional ownership data for a company, it also makes sense to study analyst sentiments to know which way the wind is blowing. Our information suggests that there isn't any analyst coverage of the stock, so it is probably little known.

Insider Ownership Of Tian Jin Bohai ChemicalLtd

The definition of an insider can differ slightly between different countries, but members of the board of directors always count. 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 information suggests that Tian Jin Bohai Chemical Co.,Ltd. insiders own under 1% of the company. However, it's possible that insiders might have an indirect interest through a more complex structure. It seems the board members have no more than CN¥6.9m worth of shares in the CN¥2.6b company. Many investors in smaller companies prefer to see the board more heavily invested. You can click here to see if those insiders have been buying or selling.

General Public Ownership

With a 43% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Tian Jin Bohai ChemicalLtd. 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

It seems that Private Companies own 50%, of the Tian Jin Bohai ChemicalLtd 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 Tian Jin Bohai ChemicalLtd better, we need to consider many other factors. Be aware that Tian Jin Bohai ChemicalLtd is showing 1 warning sign in our investment analysis , you should know about...

If you would prefer check out another company -- one with potentially superior financials -- then do not miss this free list of interesting companies, backed by strong financial data.

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.