CEO Zhong Zhao, Zylox-Tonbridge Medical Technology Co., Ltd.'s (HKG:2190) largest shareholder sees value of holdings go down 11% after recent drop

Key Insights

• Significant insider control over Zylox-Tonbridge Medical Technology implies vested interests in company growth
• 54% of the business is held by the top 8 shareholders
• 21% of Zylox-Tonbridge Medical Technology is held by Institutions

Every investor in Zylox-Tonbridge Medical Technology Co., Ltd. (HKG:2190) should be aware of the most powerful shareholder groups. And the group that holds the biggest piece of the pie are individual insiders with 22% ownership. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

As market cap fell to HK$3.5b last week, insiders would have faced the highest losses than any other shareholder groups of the company.

In the chart below, we zoom in on the different ownership groups of Zylox-Tonbridge Medical Technology.

View our latest analysis for Zylox-Tonbridge Medical Technology

What Does The Institutional Ownership Tell Us About Zylox-Tonbridge Medical Technology?

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.

We can see that Zylox-Tonbridge Medical Technology does have institutional investors; and they hold a good portion of the company's stock. This implies the analysts working for those institutions have looked at the stock and they like it. But just like anyone else, they could be wrong. 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 Zylox-Tonbridge Medical Technology, (below). Of course, keep in mind that there are other factors to consider, too.

It looks like hedge funds own 5.5% of Zylox-Tonbridge Medical Technology shares. That worth noting, since hedge funds are often quite active investors, who may try to influence management. Many want to see value creation (and a higher share price) in the short term or medium term. The company's CEO Zhong Zhao is the largest shareholder with 13% of shares outstanding. Meanwhile, the second and third largest shareholders, hold 7.7% and 6.3%, of the shares outstanding, respectively.

On further inspection, we found that more than half the company's shares are owned by the top 8 shareholders, suggesting that the interests of the larger shareholders are balanced out to an extent by the smaller ones.

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. There are plenty of analysts covering the stock, so it might be worth seeing what they are forecasting, too.

Insider Ownership Of Zylox-Tonbridge Medical Technology

The definition of company insiders can be subjective and does vary between jurisdictions. Our data reflects individual insiders, capturing board members at the very least. 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 information suggests that insiders maintain a significant holding in Zylox-Tonbridge Medical Technology Co., Ltd.. Insiders have a HK$780m stake in this HK$3.5b business. 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 18% stake in Zylox-Tonbridge Medical Technology. This size of ownership, while considerable, may not be enough to change company policy if the decision is not in sync with other large shareholders.

Private Equity Ownership

With a stake of 20%, private equity firms could influence the Zylox-Tonbridge Medical Technology board. Sometimes we see private equity stick around for the long term, but generally speaking they have a shorter investment horizon and -- as the name suggests -- don't invest in public companies much. After some time they may look to sell and redeploy capital elsewhere.

Next Steps:

While it is well worth considering the different groups that own a company, there are other factors that are even more important.

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.