Key Insights

• Significant insider control over TES Touch Embedded Solutions (Xiamen) implies vested interests in company growth
• 51% of the business is held by the top 6 shareholders
• Institutions own 16% of TES Touch Embedded Solutions (Xiamen)

Every investor in TES Touch Embedded Solutions (Xiamen) Co., Ltd. (SZSE:003019) should be aware of the most powerful shareholder groups. The group holding the most number of shares in the company, around 45% 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 market cap fell to CN¥3.8b 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 TES Touch Embedded Solutions (Xiamen), beginning with the chart below.

What Does The Institutional Ownership Tell Us About TES Touch Embedded Solutions (Xiamen)?

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.

TES Touch Embedded Solutions (Xiamen) already has institutions on the share registry. Indeed, they own a respectable stake in the company. This suggests some credibility amongst professional investors. But we can't rely on that fact alone since institutions make bad investments sometimes, just like everyone does. 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 TES Touch Embedded Solutions (Xiamen)'s 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 TES Touch Embedded Solutions (Xiamen). Looking at our data, we can see that the largest shareholder is Chao-Juei Chiang with 31% of shares outstanding. In comparison, the second and third largest shareholders hold about 7.7% and 5.4% of the stock. Mingfang Li, who is the third-largest shareholder, also happens to hold the title of Member of the Board of Directors.

We also observed that the top 6 shareholders account for more than half of the share register, with a few smaller shareholders to balance the interests of the larger ones to a certain extent.

While it makes sense to study institutional ownership data for a company, it also makes sense to study analyst sentiments to know which way the wind is blowing. There is a little analyst coverage of the stock, but not much. So there is room for it to gain more coverage.

Insider Ownership Of TES Touch Embedded Solutions (Xiamen)

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.

It seems insiders own a significant proportion of TES Touch Embedded Solutions (Xiamen) Co., Ltd.. It has a market capitalization of just CN¥3.8b, and insiders have CN¥1.7b worth of shares in their own names. We would say this shows alignment with shareholders, but it is worth noting that the company is still quite small; some insiders may have founded the business. You can click here to see if those insiders have been buying or selling.

General Public Ownership

With a 35% ownership, the general public, mostly comprising of individual investors, have some degree of sway over TES Touch Embedded Solutions (Xiamen). 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. Consider risks, for instance. Every company has them, and we've spotted 1 warning sign for TES Touch Embedded Solutions (Xiamen) you should know about.

But ultimately it is the future, not the past, that will determine how well the owners of this business will do. Therefore we think it advisable to take a look at this free report showing whether analysts are predicting a brighter 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.