Stock Analysis

Lijun Yang TFG International Group Limited's (HKG:542) CEO is the most bullish insider, and their stock value gained 11%last week

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Key Insights

  • Insiders appear to have a vested interest in TFG International Group's growth, as seen by their sizeable ownership
  • A total of 2 investors have a majority stake in the company with 64% ownership
  • Ownership research, combined with past performance data can help provide a good understanding of opportunities in a stock

To get a sense of who is truly in control of TFG International Group Limited (HKG:542), it is important to understand the ownership structure of the business. With 64% stake, individual insiders possess the maximum shares in the company. Put another way, the group faces the maximum upside potential (or downside risk).

As a result, insiders scored the highest last week as the company hit HK$1.7b market cap following a 11% gain in the stock.

In the chart below, we zoom in on the different ownership groups of TFG International Group.

Check out our latest analysis for TFG International Group

SEHK:542 Ownership Breakdown March 16th 2023

What Does The Lack Of Institutional Ownership Tell Us About TFG International Group?

Institutional investors often avoid companies that are too small, too illiquid or too risky for their tastes. But it's unusual to see larger companies without any institutional investors.

There are many reasons why a company might not have any institutions on the share registry. It may be hard for institutions to buy large amounts of shares, if liquidity (the amount of shares traded each day) is low. If the company has not needed to raise capital, institutions might lack the opportunity to build a position. It is also possible that fund managers don't own the stock because they aren't convinced it will perform well. TFG International Group might not have the sort of past performance institutions are looking for, or perhaps they simply have not studied the business closely.

SEHK:542 Earnings and Revenue Growth March 16th 2023

TFG International Group is not owned by hedge funds. The company's CEO Lijun Yang is the largest shareholder with 45% of shares outstanding. With an ownership of 20%, the second largest shareholder is Anfeng Huang

To make our study more interesting, we found that the top 2 shareholders have a majority ownership in the company, meaning that they are powerful enough to influence the decisions of the company.

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. We're not picking up on any analyst coverage of the stock at the moment, so the company is unlikely to be widely held.

Insider Ownership Of TFG International Group

While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. 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 information suggests that insiders own more than half of TFG International Group Limited. This gives them effective control of the company. That means they own HK$1.1b worth of shares in the HK$1.7b company. That's quite meaningful. Most would argue this is a positive, showing strong alignment with shareholders. You can click here to see if those insiders have been buying or selling.

General Public Ownership

The general public, who are usually individual investors, hold a 36% stake in TFG International Group. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand TFG International Group better, we need to consider many other factors. For example, we've discovered 4 warning signs for TFG International Group (2 are a bit concerning!) that you should be aware of before investing here.

If you would prefer check out another company -- one with potentially superior financials -- then do not miss this free list of interesting companies, backed by strong financial data.

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.

Valuation is complex, but we're helping make it simple.

Find out whether TFG International Group is potentially over or undervalued by checking out our comprehensive analysis, which includes fair value estimates, risks and warnings, dividends, insider transactions and financial health.

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