Tong Tong AI Social Group Limited's (HKG:628) last week's 11% decline must have disappointed retail investors who have a significant stake

Key Insights

• The considerable ownership by retail investors in Tong Tong AI Social Group indicates that they collectively have a greater say in management and business strategy
• 44% of the business is held by the top 3 shareholders
• Insiders own 44% of Tong Tong AI Social Group

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If you want to know who really controls Tong Tong AI Social Group Limited (HKG:628), then you'll have to look at the makeup of its share registry. With 56% stake, retail investors possess the maximum shares in the company. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

Following a 11% decrease in the stock price last week, retail investors suffered the most losses, but insiders who own 44% stock also took a hit.

In the chart below, we zoom in on the different ownership groups of Tong Tong AI Social Group.

View our latest analysis for Tong Tong AI Social Group

What Does The Lack Of Institutional Ownership Tell Us About Tong Tong AI Social Group?

We don't tend to see institutional investors holding stock of companies that are very risky, thinly traded, or very small. Though we do sometimes see large companies without institutions on the register, it's not particularly common.

There are multiple explanations for why institutions don't own a stock. The most common is that the company is too small relative to funds under management, so the institution does not bother to look closely at the company. On the other hand, it's always possible that professional investors are avoiding a company because they don't think it's the best place for their money. Institutional investors may not find the historic growth of the business impressive, or there might be other factors at play. You can see the past revenue performance of Tong Tong AI Social Group, for yourself, below.

Hedge funds don't have many shares in Tong Tong AI Social Group. Juan Du is currently the company's largest shareholder with 32% of shares outstanding. With 6.5% and 6.1% of the shares outstanding respectively, Chun-Shun Ko and Minjing Luo are the second and third largest shareholders.

Our studies suggest that the top 3 shareholders collectively control less than half of the company's shares, meaning that the company's shares are widely disseminated and there is no dominant shareholder.

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. Our information suggests that there isn't any analyst coverage of the stock, so it is probably little known.

Insider Ownership Of Tong Tong AI Social 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. 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.

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.

Our information suggests that insiders maintain a significant holding in Tong Tong AI Social Group Limited. Insiders have a HK$565m stake in this HK$1.3b business. 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

The general public, mostly comprising of individual investors, collectively holds 56% of Tong Tong AI Social Group shares. With this amount of ownership, retail investors can collectively play a role in decisions that affect shareholder returns, such as dividend policies and the appointment of directors. They can also exercise the power to vote on acquisitions or mergers that may not improve profitability.

Next Steps:

While it is well worth considering the different groups that own a company, there are other factors that are even more important. Be aware that Tong Tong AI Social Group is showing 1 warning sign in our investment analysis , you should know about...

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.

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.