Key Insights

• Significant control over Tianfeng Securities by retail investors implies that the general public has more power to influence management and governance-related decisions
• 40% of the business is held by the top 25 shareholders
• Institutions own 12% of Tianfeng Securities

If you want to know who really controls Tianfeng Securities Co., Ltd. (SHSE:601162), then you'll have to look at the makeup of its share registry. We can see that retail investors own the lion's share in the company with 59% ownership. Put another way, the group faces the maximum upside potential (or downside risk).

Meanwhile, private companies make up 27% of the company's shareholders.

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

What Does The Institutional Ownership Tell Us About Tianfeng Securities?

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.

As you can see, institutional investors have a fair amount of stake in Tianfeng Securities. 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. When multiple institutions own a stock, there's always a risk that they are in a 'crowded trade'. When such a trade goes wrong, multiple parties may compete to sell stock fast. This risk is higher in a company without a history of growth. You can see Tianfeng Securities' historic earnings and revenue below, but keep in mind there's always more to the story.

We note that hedge funds don't have a meaningful investment in Tianfeng Securities. Looking at our data, we can see that the largest shareholder is Hubei Hongtai Group Co., Ltd with 15% of shares outstanding. Meanwhile, the second and third largest shareholders, hold 8.9% and 2.3%, of the shares outstanding, respectively.

A deeper look at our ownership data shows that the top 25 shareholders collectively hold less than half of the register, suggesting a large group of small holders where no single shareholder has a majority.

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 Tianfeng Securities

While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. 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.

We note our data does not show any board members holding shares, personally. Given we are not picking up on insider ownership, we may have missing data. Therefore, it would be interesting to assess the CEO compensation and tenure, here.

General Public Ownership

The general public, who are usually individual investors, hold a substantial 59% stake in Tianfeng Securities, suggesting it is a fairly popular stock. This level of ownership gives investors from the wider public some power to sway key policy decisions such as board composition, executive compensation, and the dividend payout ratio.

Private Company Ownership

We can see that Private Companies own 27%, of the shares on issue. It's hard to draw any conclusions from this fact alone, so its worth looking into who owns those private companies. Sometimes insiders or other related parties have an interest in shares in a public company through a separate private company.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand Tianfeng Securities better, we need to consider many other factors. Case in point: We've spotted 2 warning signs for Tianfeng Securities you should be aware of, and 1 of them is a bit unpleasant.

If you would prefer check out another company -- one with potentially superior financials -- then do not miss this free list of interesting companies, backed by strong financial data.

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.