Individual investors among Tianli Education International Holdings Limited's (HKG:1773) largest stockholders and were hit after last week's 13% price drop

By
Simply Wall St
Published
May 09, 2022
SEHK:1773
Source: Shutterstock

To get a sense of who is truly in control of Tianli Education International Holdings Limited (HKG:1773), it is important to understand the ownership structure of the business. And the group that holds the biggest piece of the pie are individual investors with 49% ownership. Put another way, the group faces the maximum upside potential (or downside risk).

While insiders, who own 42% shares weren’t spared from last week’s HK$215m market cap drop, individual investors as a group suffered the maximum losses

Let's delve deeper into each type of owner of Tianli Education International Holdings, beginning with the chart below.

Check out our latest analysis for Tianli Education International Holdings

ownership-breakdown
SEHK:1773 Ownership Breakdown May 9th 2022

What Does The Institutional Ownership Tell Us About Tianli Education International Holdings?

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.

Institutions have a very small stake in Tianli Education International Holdings. That indicates that the company is on the radar of some funds, but it isn't particularly popular with professional investors at the moment. So if the company itself can improve over time, we may well see more institutional buyers in the future. When multiple institutional investors want to buy shares, we often see a rising share price. The past revenue trajectory (shown below) can be an indication of future growth, but there are no guarantees.

earnings-and-revenue-growth
SEHK:1773 Earnings and Revenue Growth May 9th 2022

We note that hedge funds don't have a meaningful investment in Tianli Education International Holdings. Looking at our data, we can see that the largest shareholder is the CEO Shi Luo with 41% of shares outstanding. Meanwhile, the second and third largest shareholders, hold 2.7% and 2.4%, of the shares outstanding, respectively.

On further inspection, we found that more than half the company's shares are owned by the top 10 shareholders, suggesting that the interests of the larger shareholders are balanced out to an extent by the smaller ones.

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 Tianli Education International Holdings

While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. The company management answer to the board and the latter should represent the interests of shareholders. Notably, sometimes top-level managers are on the board themselves.

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 Tianli Education International Holdings Limited. Insiders have a HK$609m stake in this HK$1.5b business. It is great to see insiders so invested in the business. It might be worth checking if those insiders have been buying recently.

General Public Ownership

The general public, who are usually individual investors, hold a 49% stake in Tianli Education International Holdings. 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:

It's always worth thinking about the different groups who own shares in a company. But to understand Tianli Education International Holdings better, we need to consider many other factors. To that end, you should learn about the 3 warning signs we've spotted with Tianli Education International Holdings (including 1 which is a bit concerning) .

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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