Public companies who hold 28% of Tongcheng Travel Holdings Limited (HKG:780) gained 4.2%, institutions profited as well

Key Insights

• Tongcheng Travel Holdings' significant public companies ownership suggests that the key decisions are influenced by shareholders from the larger public
• 50% of the business is held by the top 6 shareholders
• Insiders have sold recently

To get a sense of who is truly in control of Tongcheng Travel Holdings Limited (HKG:780), it is important to understand the ownership structure of the business. And the group that holds the biggest piece of the pie are public companies with 28% ownership. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

While public companies were the group that benefitted the most from last week’s HK$1.7b market cap gain, institutions too had a 27% share in those profits.

Let's take a closer look to see what the different types of shareholders can tell us about Tongcheng Travel Holdings.

View our latest analysis for Tongcheng Travel Holdings

What Does The Institutional Ownership Tell Us About Tongcheng Travel 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.

Tongcheng Travel Holdings 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. It is not uncommon to see a big share price drop if two large institutional investors try to sell out of a stock at the same time. So it is worth checking the past earnings trajectory of Tongcheng Travel Holdings, (below). Of course, keep in mind that there are other factors to consider, too.

Hedge funds don't have many shares in Tongcheng Travel Holdings. Looking at our data, we can see that the largest shareholder is Trip.com Group Limited with 20% of shares outstanding. With 14% and 7.2% of the shares outstanding respectively, Tencent Holdings Ltd., Investment Arm and Tencent Holdings Limited are the second and third largest shareholders.

We did some more digging and found that 6 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. There are plenty of analysts covering the stock, so it might be worth seeing what they are forecasting, too.

Insider Ownership Of Tongcheng Travel Holdings

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.

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.

We can see that insiders own shares in Tongcheng Travel Holdings Limited. It is a pretty big company, so it is generally a positive to see some potentially meaningful alignment. In this case, they own around HK$567m 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 26% stake in the company, and hence can't easily be ignored. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.

Private Equity Ownership

With a stake of 14%, private equity firms could influence the Tongcheng Travel Holdings 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

Our data indicates that Private Companies hold 4.2%, of the company's shares. Private companies may be related parties. Sometimes insiders have an interest in a public company through a holding in a private company, rather than in their own capacity as an individual. While it's hard to draw any broad stroke conclusions, it is worth noting as an area for further research.

Public Company Ownership

Public companies currently own 28% of Tongcheng Travel Holdings stock. We can't be certain but it is quite possible this is a strategic stake. The businesses may be similar, or work together.

Next Steps:

I find it very interesting to look at who exactly owns a company. But to truly gain insight, we need to consider other information, too. To that end, you should be aware of the 1 warning sign we've spotted with Tongcheng Travel Holdings .

Ultimately the future is most important. You can access this free report on analyst forecasts for the company.

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.