- Hong Kong
Institutional investors in Tongcheng Travel Holdings Limited (HKG:780) lost 5.5% last week but have reaped the benefits of longer-term growth
- Given the large stake in the stock by institutions, Tongcheng Travel Holdings' stock price might be vulnerable to their trading decisions
- The top 5 shareholders own 51% of the company
- Ownership research along with analyst forecasts data help provide a good understanding of opportunities in a stock
If you want to know who really controls Tongcheng Travel Holdings Limited (HKG:780), then you'll have to look at the makeup of its share registry. And the group that holds the biggest piece of the pie are institutions with 33% ownership. Put another way, the group faces the maximum upside potential (or downside risk).
Institutional investors endured the highest losses after the company's market cap fell by HK$1.9b last week. However, the 12% one-year return to shareholders might have softened the blow. They should, however, be mindful of further losses in the future.
Let's delve deeper into each type of owner of Tongcheng Travel Holdings, beginning with the chart below.
View our latest analysis for Tongcheng Travel Holdings
What Does The Institutional Ownership Tell Us About Tongcheng Travel Holdings?
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.
As you can see, institutional investors have a fair amount of stake in Tongcheng Travel Holdings. This suggests some credibility amongst professional investors. But we can't rely on that fact alone since institutions make bad investments sometimes, just like everyone does. 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 Tongcheng Travel Holdings' earnings history below. Of course, the future is what really matters.
We note that hedge funds don't have a meaningful investment in Tongcheng Travel Holdings. Looking at our data, we can see that the largest shareholder is Trip.com Group Limited with 21% of shares outstanding. Tencent Holdings Ltd., Investment Arm is the second largest shareholder owning 14% of common stock, and Tencent Holdings Limited holds about 7.4% of the company stock.
On looking further, we found that 51% of the shares are owned by the top 5 shareholders. In other words, these shareholders have a meaningful say in the decisions of the company.
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 a reasonable number of analysts covering the stock, so it might be useful to find out their aggregate view on the future.
Insider Ownership Of Tongcheng Travel 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.
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 some shares in Tongcheng Travel Holdings Limited. This is a big company, so it is good to see this level of alignment. Insiders own HK$397m worth of shares (at current prices). It is good to see this level of investment by insiders. You can check here to see if those insiders have been buying recently.
General Public Ownership
The general public-- including retail investors -- own 24% stake in the company, and hence can't easily be ignored. 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.
Private Equity Ownership
Private equity firms hold a 14% stake in Tongcheng Travel Holdings. This suggests they can be influential in key policy decisions. 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.
Public Company Ownership
We can see that public companies hold 28% of the Tongcheng Travel Holdings shares on issue. This may be a strategic interest and the two companies may have related business interests. It could be that they have de-merged. This holding is probably worth investigating further.
It's always worth thinking about the different groups who own shares in a company. But to understand Tongcheng Travel Holdings better, we need to consider many other factors.
I always like to check for a history of revenue growth. You can too, by accessing this free chart of historic revenue and earnings in this detailed graph.
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.
Tongcheng Travel Holdings
Tongcheng Travel Holdings Limited, an investment holding company, provides travel related services in the People’s Republic of China.
Adequate balance sheet with reasonable growth potential.