Key Insights

• The considerable ownership by private equity firms in Transcenta Holding indicates that they collectively have a greater say in management and business strategy
• A total of 4 investors have a majority stake in the company with 59% ownership
• Insiders have bought recently

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A look at the shareholders of Transcenta Holding Limited (HKG:6628) can tell us which group is most powerful. The group holding the most number of shares in the company, around 49% to be precise, is private equity firms. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

Clearly, private equity firms benefitted the most after the company's market cap rose by HK$162m last week.

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

View our latest analysis for Transcenta Holding

What Does The Institutional Ownership Tell Us About Transcenta Holding?

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.

As you can see, institutional investors have a fair amount of stake in Transcenta Holding. 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. It is not uncommon to see a big share price drop if two large institutional investors try to sell out of a stock at the same time. So it is worth checking the past earnings trajectory of Transcenta Holding, (below). Of course, keep in mind that there are other factors to consider, too.

Hedge funds don't have many shares in Transcenta Holding. The company's largest shareholder is Eli Lilly Investment Consulting (Shanghai) Co., Ltd., with ownership of 17%. For context, the second largest shareholder holds about 17% of the shares outstanding, followed by an ownership of 13% by the third-largest shareholder. Xueming Qian, who is the third-largest shareholder, also happens to hold the title of Chairman of the Board.

Our research also brought to light the fact that roughly 59% of the company is controlled by the top 4 shareholders suggesting that these owners wield significant influence on the business.

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 some analyst coverage of the stock, but it could still become more well known, with time.

Insider Ownership Of Transcenta Holding

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. 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.

I generally consider insider ownership to be a good thing. However, on some occasions it makes it more difficult for other shareholders to hold the board accountable for decisions.

It seems insiders own a significant proportion of Transcenta Holding Limited. Insiders have a HK$123m stake in this HK$938m business. This may suggest that the founders still own a lot of shares. You can click here to see if they have been buying or selling.

General Public Ownership

The general public-- including retail investors -- own 24% stake in the company, and hence can't easily be ignored. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.

Private Equity Ownership

With a stake of 49%, private equity firms could influence the Transcenta Holding board. Sometimes we see private equity stick around for the long term, but generally speaking they have a shorter investment horizon and -- as the name suggests -- don't invest in public companies much. After some time they may look to sell and redeploy capital elsewhere.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand Transcenta Holding better, we need to consider many other factors. Be aware that Transcenta Holding is showing 4 warning signs in our investment analysis , and 2 of those shouldn't be ignored...

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.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.