Institutional owners may take dramatic actions as Suzhou TZTEK Technology Co., Ltd's (SHSE:688003) recent 6.7% drop adds to one-year losses

Key Insights

• Given the large stake in the stock by institutions, Suzhou TZTEK Technology's stock price might be vulnerable to their trading decisions
• 54% of the business is held by the top 3 shareholders
• 15% of Suzhou TZTEK Technology is held by insiders

A look at the shareholders of Suzhou TZTEK Technology Co., Ltd (SHSE:688003) can tell us which group is most powerful. With 29% stake, institutions 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).

And institutional investors endured the highest losses after the company's share price fell by 6.7% last week. Needless to say, the recent loss which further adds to the one-year loss to shareholders of 22% might not go down well especially with this category of shareholders. Often called “market movers", institutions wield significant power in influencing the price dynamics of any stock. As a result, if the decline continues, institutional investors may be pressured to sell Suzhou TZTEK Technology which might hurt individual investors.

Let's delve deeper into each type of owner of Suzhou TZTEK Technology, beginning with the chart below.

Check out our latest analysis for Suzhou TZTEK Technology

What Does The Institutional Ownership Tell Us About Suzhou TZTEK 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.

As you can see, institutional investors have a fair amount of stake in Suzhou TZTEK Technology. 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 Suzhou TZTEK Technology, (below). Of course, keep in mind that there are other factors to consider, too.

Hedge funds don't have many shares in Suzhou TZTEK Technology. Suzhou Qingyi Investment Co., Ltd. is currently the largest shareholder, with 25% of shares outstanding. With 21% and 8.5% of the shares outstanding respectively, Ningbo Tzek Hezhi Investment Management Partnership Enterprise (Limited Partnership) and Yihua Xu are the second and third largest shareholders. Yihua Xu, who is the third-largest shareholder, also happens to hold the title of Chairman of the Board.

To make our study more interesting, we found that the top 3 shareholders have a majority ownership in the company, meaning that they are powerful enough to influence the decisions of the company.

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 Suzhou TZTEK Technology

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.

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 most recent data indicates that insiders own a reasonable proportion of Suzhou TZTEK Technology Co., Ltd. Insiders own CN¥968m worth of shares in the CN¥6.3b company. This may suggest that the founders still own a lot of shares. You can click here to see if they have been buying or selling.

General Public Ownership

The general public-- including retail investors -- own 29% stake in the company, and hence can't easily be ignored. 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

With a stake of 25%, private equity firms could influence the Suzhou TZTEK Technology board. 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.

Next Steps:

While it is well worth considering the different groups that own a company, there are other factors that are even more important. Consider risks, for instance. Every company has them, and we've spotted 1 warning sign for Suzhou TZTEK Technology you should know about.

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.

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