Key Insights

• Significant insider control over TianJin JinRong TianYu Precision Machinery implies vested interests in company growth
• The top 3 shareholders own 51% of the company
• Using data from company's past performance alongside ownership research, one can better assess the future performance of a company

If you want to know who really controls TianJin JinRong TianYu Precision Machinery Inc. (SZSE:300988), then you'll have to look at the makeup of its share registry. The group holding the most number of shares in the company, around 61% to be precise, is individual insiders. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

As a result, insiders were the biggest beneficiaries of last week's 22% gain.

Let's take a closer look to see what the different types of shareholders can tell us about TianJin JinRong TianYu Precision Machinery.

What Does The Institutional Ownership Tell Us About TianJin JinRong TianYu Precision Machinery?

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.

Institutions have a very small stake in TianJin JinRong TianYu Precision Machinery. That indicates that the company is on the radar of some funds, but it isn't particularly popular with professional investors at the moment. So if the company itself can improve over time, we may well see more institutional buyers in the future. When multiple institutional investors want to buy shares, we often see a rising share price. The past revenue trajectory (shown below) can be an indication of future growth, but there are no guarantees.

We note that hedge funds don't have a meaningful investment in TianJin JinRong TianYu Precision Machinery. Looking at our data, we can see that the largest shareholder is Xuewei Yan with 25% of shares outstanding. In comparison, the second and third largest shareholders hold about 21% and 4.5% of the stock. Zhi Yun, who is the third-largest shareholder, also happens to hold the title of Member of the Board of Directors. Furthermore, CEO Hong Zhao is the owner of 3.2% of the company's shares.

To make our study more interesting, we found that the top 3 shareholders have a majority ownership in the company, meaning that they are powerful enough to influence 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. As far as we can tell there isn't analyst coverage of the company, so it is probably flying under the radar.

Insider Ownership Of TianJin JinRong TianYu Precision Machinery

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.

It seems that insiders own more than half the TianJin JinRong TianYu Precision Machinery Inc. stock. This gives them a lot of power. Given it has a market cap of CN¥2.7b, that means they have CN¥1.7b worth of shares. It is good to see this level of investment. You can check here to see if those insiders have been buying recently.

General Public Ownership

The general public, who are usually individual investors, hold a 34% stake in TianJin JinRong TianYu Precision Machinery. 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:

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. Be aware that TianJin JinRong TianYu Precision Machinery is showing 2 warning signs in our investment analysis , and 1 of those shouldn't be ignored...

Of course this may not be the best stock to buy. Therefore, you may wish to see our free collection of interesting prospects boasting favorable financials.

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.