Suzhou TZTEK Technology Co., Ltd (SHSE:688003) surges 7.2%; individual investors who own 32% shares profited along with institutions

Key Insights

• The considerable ownership by individual investors in Suzhou TZTEK Technology indicates that they collectively have a greater say in management and business strategy
• A total of 3 investors have a majority stake in the company with 54% ownership
• 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. The group holding the most number of shares in the company, around 32% to be precise, is individual investors. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

While individual investors were the group that reaped the most benefits after last week’s 7.2% price gain, institutions also received a 26% cut.

Let's take a closer look to see what the different types of shareholders can tell us about Suzhou TZTEK Technology.

View our latest analysis for Suzhou TZTEK Technology

What Does The Institutional Ownership Tell Us About Suzhou TZTEK Technology?

Institutions typically measure themselves against a benchmark when reporting to their own investors, so they often become more enthusiastic about a stock once it's included in a major index. We would expect most companies to have some institutions on the register, especially if they are growing.

Suzhou TZTEK 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. 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.

Suzhou TZTEK Technology is not owned by hedge funds. Suzhou Qingyi Investment Co., Ltd. is currently the company's largest shareholder with 25% of shares outstanding. For context, the second largest shareholder holds about 21% of the shares outstanding, followed by an ownership of 8.5% by the third-largest shareholder. Yihua Xu, who is the third-largest shareholder, also happens to hold the title of Chairman of the Board.

After doing some more digging, we found that the top 3 shareholders collectively control more than half of the company's shares, implying that they have considerable power to influence the company's decisions.

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 Suzhou TZTEK Technology

While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. 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.

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.

It seems insiders own a significant proportion of Suzhou TZTEK Technology Co., Ltd. It has a market capitalization of just CN¥6.0b, and insiders have CN¥921m worth of shares in their own names. 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, who are usually individual investors, hold a 32% stake in Suzhou TZTEK Technology. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.

Private Equity Ownership

With a stake of 25%, private equity firms could influence the Suzhou TZTEK Technology board. Some investors might be encouraged by this, since private equity are sometimes able to encourage strategies that help the market see the value in the company. Alternatively, those holders might be exiting the investment after taking it public.

Next Steps:

While it is well worth considering the different groups that own a company, there are other factors that are even more important. To that end, you should be aware of the 1 warning sign we've spotted with Suzhou TZTEK Technology .

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.