Tiangong International Company Limited (HKG:826) Top Key Executive Xiaokun Zhu's holdings dropped 8.9% in value as a result of the recent pullback

Key Insights

• Significant insider control over Tiangong International implies vested interests in company growth
• A total of 2 investors have a majority stake in the company with 53% ownership
• Institutional ownership in Tiangong International is 11%

If you want to know who really controls Tiangong International Company Limited (HKG:826), 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 individual insiders with 53% ownership. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

As market cap fell to HK$4.3b last week, insiders would have faced the highest losses than any other shareholder groups of the company.

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

See our latest analysis for Tiangong International

What Does The Institutional Ownership Tell Us About Tiangong International?

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.

Tiangong International 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. 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 Tiangong International's earnings history below. Of course, the future is what really matters.

We note that hedge funds don't have a meaningful investment in Tiangong International. From our data, we infer that the largest shareholder is Xiaokun Zhu (who also holds the title of Top Key Executive) with 28% of shares outstanding. Its usually considered a good sign when insiders own a significant number of shares in the company, and in this case, we're glad to see a company insider play the role of a key stakeholder. Meanwhile, the second and third largest shareholders, hold 25% and 2.8%, of the shares outstanding, respectively. Interestingly, the second-largest shareholder, Zefeng Zhu is also Chief Executive Officer, again, pointing towards strong insider ownership amongst the company's top shareholders.

After doing some more digging, we found that the top 2 shareholders collectively control more than half of the company's shares, implying that they have considerable power to influence the company's decisions.

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. Quite a few analysts cover the stock, so you could look into forecast growth quite easily.

Insider Ownership Of Tiangong International

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.

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 own more than half of Tiangong International Company Limited. This gives them effective control of the company. Given it has a market cap of HK$4.3b, that means they have HK$2.3b worth of shares. 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 Tiangong International. 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:

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 would prefer discover what analysts are predicting in terms of future growth, do not miss this free report on analyst forecasts.

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.