Key Insights

• Significant control over Tofflon Science and Technology Group by individual investors implies that the general public has more power to influence management and governance-related decisions
• 50% of the business is held by the top 11 shareholders
• Insiders own 36% of Tofflon Science and Technology Group

A look at the shareholders of Tofflon Science and Technology Group Co., Ltd. (SZSE:300171) can tell us which group is most powerful. We can see that individual investors own the lion's share in the company with 47% ownership. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

Following a 4.1% decrease in the stock price last week, individual investors suffered the most losses, but insiders who own 36% stock also took a hit.

In the chart below, we zoom in on the different ownership groups of Tofflon Science and Technology Group.

What Does The Institutional Ownership Tell Us About Tofflon Science and Technology Group?

Institutions typically measure themselves against a benchmark when reporting to their own investors, so they often become more enthusiastic about a stock once it's included in a major index. We would expect most companies to have some institutions on the register, especially if they are growing.

We can see that Tofflon Science and Technology Group does have institutional investors; and they hold a good portion of the company's stock. 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 Tofflon Science and Technology Group's historic earnings and revenue below, but keep in mind there's always more to the story.

Hedge funds don't have many shares in Tofflon Science and Technology Group. With a 34% stake, CEO Xiaodong Zheng is the largest shareholder. The second and third largest shareholders are CS Capital Co., Ltd. and Shanghai Biomedical Industry Equity Fund Management Co., Ltd., with an equal amount of shares to their name at 3.2%.

After doing some more digging, we found that the top 11 have the combined ownership of 50% in the company, suggesting that no single shareholder has significant control over the company.

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 is a little analyst coverage of the stock, but not much. So there is room for it to gain more coverage.

Insider Ownership Of Tofflon Science and Technology Group

The definition of company insiders can be subjective and does vary between jurisdictions. Our data reflects individual insiders, capturing board members at the very least. Company management run the business, but the CEO will answer to the board, even if he or she is a member of it.

Most consider insider ownership a positive because it can indicate the board is well aligned with other shareholders. However, on some occasions too much power is concentrated within this group.

It seems insiders own a significant proportion of Tofflon Science and Technology Group Co., Ltd.. It is very interesting to see that insiders have a meaningful CN¥3.4b stake in this CN¥9.6b business. 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-- including retail investors -- own 47% stake in the company, and hence can't easily be ignored. 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. Consider for instance, the ever-present spectre of investment risk. We've identified 3 warning signs with Tofflon Science and Technology Group (at least 1 which is a bit unpleasant) , and understanding them should be part of your investment process.

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.