Retail investors invested in Tongding Interconnection Information Co., Ltd. (SZSE:002491) copped the brunt of last week's CN¥529m market cap decline

Key Insights

• The considerable ownership by retail investors in Tongding Interconnection Information indicates that they collectively have a greater say in management and business strategy
• 50% of the business is held by the top 25 shareholders
• Using data from company's past performance alongside ownership research, one can better assess the future performance of a company

Every investor in Tongding Interconnection Information Co., Ltd. (SZSE:002491) should be aware of the most powerful shareholder groups. And the group that holds the biggest piece of the pie are retail investors with 50% ownership. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

And last week, retail investors endured the biggest losses as the stock fell by 8.0%.

Let's delve deeper into each type of owner of Tongding Interconnection Information, beginning with the chart below.

See our latest analysis for Tongding Interconnection Information

What Does The Institutional Ownership Tell Us About Tongding Interconnection Information?

Many institutions measure their performance against an index that approximates the local market. So they usually pay more attention to companies that are included in major indices.

Institutions have a very small stake in Tongding Interconnection Information. That indicates that the company is on the radar of some funds, but it isn't particularly popular with professional investors at the moment. If the company is growing earnings, that may indicate that it is just beginning to catch the attention of these deep-pocketed investors. We sometimes see a rising share price when a few big institutions want to buy a certain stock at the same time. The history of earnings and revenue, which you can see below, could be helpful in considering if more institutional investors will want the stock. Of course, there are plenty of other factors to consider, too.

We note that hedge funds don't have a meaningful investment in Tongding Interconnection Information. The company's largest shareholder is TongDing Group Co., Ltd., with ownership of 32%. In comparison, the second and third largest shareholders hold about 7.1% and 4.6% of the stock. Xiaoping Shen, who is the third-largest shareholder, also happens to hold the title of Chairman of the Board.

A deeper look at our ownership data shows that the top 25 shareholders collectively hold less than half of the register, suggesting a large group of small holders where no single shareholder has a majority.

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. Our information suggests that there isn't any analyst coverage of the stock, so it is probably little known.

Insider Ownership Of Tongding Interconnection Information

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.

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.

We can report that insiders do own shares in Tongding Interconnection Information Co., Ltd.. It has a market capitalization of just CN¥6.1b, and insiders have CN¥553m worth of shares, in their own names. This shows at least some alignment. You can click here to see if those insiders have been buying or selling.

General Public Ownership

The general public, mostly comprising of individual investors, collectively holds 50% of Tongding Interconnection Information shares. This size of ownership gives investors from the general public some collective power. They can and probably do influence decisions on executive compensation, dividend policies and proposed business acquisitions.

Private Equity Ownership

With a stake of 7.1%, private equity firms could influence the Tongding Interconnection Information board. Some might like this, because private equity are sometimes activists who hold management accountable. But other times, private equity is selling out, having taking the company public.

Private Company Ownership

We can see that Private Companies own 32%, of the shares on issue. 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 Tongding Interconnection Information better, we need to consider many other factors. To that end, you should be aware of the 2 warning signs we've spotted with Tongding Interconnection Information .

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.

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.