Shenzhen TXD Technology Co.,Ltd. (SZSE:002845) surges 7.7%; retail investors who own 48% shares profited along with insiders

Key Insights

• The considerable ownership by retail investors in Shenzhen TXD TechnologyLtd indicates that they collectively have a greater say in management and business strategy
• A total of 10 investors have a majority stake in the company with 50% ownership
• Insiders own 41% of Shenzhen TXD TechnologyLtd

A look at the shareholders of Shenzhen TXD Technology Co.,Ltd. (SZSE:002845) can tell us which group is most powerful. The group holding the most number of shares in the company, around 48% to be precise, is retail investors. Put another way, the group faces the maximum upside potential (or downside risk).

While retail investors were the group that benefitted the most from last week’s CN¥390m market cap gain, insiders too had a 41% share in those profits.

In the chart below, we zoom in on the different ownership groups of Shenzhen TXD TechnologyLtd.

Check out our latest analysis for Shenzhen TXD TechnologyLtd

What Does The Institutional Ownership Tell Us About Shenzhen TXD TechnologyLtd?

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.

Shenzhen TXD TechnologyLtd already has institutions on the share registry. Indeed, they own a respectable stake in the company. 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. If multiple institutions change their view on a stock at the same time, you could see the share price drop fast. It's therefore worth looking at Shenzhen TXD TechnologyLtd's earnings history below. Of course, the future is what really matters.

Hedge funds don't have many shares in Shenzhen TXD TechnologyLtd. Looking at our data, we can see that the largest shareholder is the CEO Feng Wan with 17% of shares outstanding. With 17% and 5.0% of the shares outstanding respectively, Xiao Ping Zhong and Shanghai Guosheng Capital Management Co., Ltd. are the second and third largest shareholders.

We did some more digging and found that 10 of the top shareholders account for roughly 50% of the register, implying that along with larger shareholders, there are a few smaller shareholders, thereby balancing out each others interests somewhat.

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. As far as we can tell there isn't analyst coverage of the company, so it is probably flying under the radar.

Insider Ownership Of Shenzhen TXD TechnologyLtd

The definition of an insider can differ slightly between different countries, but members of the board of directors always count. 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.

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 most recent data indicates that insiders own a reasonable proportion of Shenzhen TXD Technology Co.,Ltd.. Insiders own CN¥2.2b worth of shares in the CN¥5.5b 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, who are usually individual investors, hold a 48% stake in Shenzhen TXD TechnologyLtd. 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.

Next Steps:

While it is well worth considering the different groups that own a company, there are other factors that are even more important. For instance, we've identified 2 warning signs for Shenzhen TXD TechnologyLtd (1 is significant) that you should be aware of.

Of course this may not be the best stock to buy. So take a peek at this free 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.