Could The Beijing Tong Ren Tang Chinese Medicine Company Limited (HKG:3613) Ownership Structure Tell Us Something Useful?

If you want to know who really controls Beijing Tong Ren Tang Chinese Medicine Company Limited (HKG:3613), then you'll have to look at the makeup of its share registry. Institutions will often hold stock in bigger companies, and we expect to see insiders owning a noticeable percentage of the smaller ones. We also tend to see lower insider ownership in companies that were previously publicly owned.

Beijing Tong Ren Tang Chinese Medicine has a market capitalization of HK$6.9b, so we would expect some institutional investors to have noticed the stock. Our analysis of the ownership of the company, below, shows that institutional investors have bought into the company. Let's delve deeper into each type of owner, to discover more about Beijing Tong Ren Tang Chinese Medicine.

Check out our latest analysis for Beijing Tong Ren Tang Chinese Medicine

What Does The Institutional Ownership Tell Us About Beijing Tong Ren Tang Chinese Medicine?

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.

Beijing Tong Ren Tang Chinese Medicine already has institutions on the share registry. Indeed, they own a respectable stake in the company. 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. 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 Beijing Tong Ren Tang Chinese Medicine's earnings history below. Of course, the future is what really matters.

Hedge funds don't have many shares in Beijing Tong Ren Tang Chinese Medicine. The company's largest shareholder is Tong Ren Tang Technologies Co. Ltd., with ownership of 38%. Meanwhile, the second and third largest shareholders, hold 34% and 2.2%, of the shares outstanding, respectively.

A more detailed study of the shareholder registry showed us that 2 of the top shareholders have a considerable amount of ownership in the company, via their 72% stake.

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 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 Beijing Tong Ren Tang Chinese Medicine

The definition of an insider can differ slightly between different countries, but members of the board of directors always count. Company management run the business, but the CEO will answer to the board, even if he or she is a member of it.

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 less than 1% of Beijing Tong Ren Tang Chinese Medicine Company Limited. However, it's possible that insiders might have an indirect interest through a more complex structure. It seems the board members have no more than HK$6.6m worth of shares in the HK$6.9b company. I generally like to see a board more invested. However it might be worth checking if those insiders have been buying.

General Public Ownership

The general public holds a 22% stake in Beijing Tong Ren Tang Chinese Medicine. 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 Company Ownership

It seems that Private Companies own 34%, of the Beijing Tong Ren Tang Chinese Medicine stock. It might be worth looking deeper into this. If related parties, such as insiders, have an interest in one of these private companies, that should be disclosed in the annual report. Private companies may also have a strategic interest in the company.

Public Company Ownership

Public companies currently own 38% of Beijing Tong Ren Tang Chinese Medicine stock. It's hard to say for sure but this suggests they have entwined business interests. This might be a strategic stake, so it's worth watching this space for changes in ownership.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand Beijing Tong Ren Tang Chinese Medicine better, we need to consider many other factors. For example, we've discovered 1 warning sign for Beijing Tong Ren Tang Chinese Medicine that you should be aware of before investing here.

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. 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.
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