Significant control over Tuniu by private companies implies that the general public has more power to influence management and governance-related decisions
A total of 3 investors have a majority stake in the company with 58% ownership
A look at the shareholders of Tuniu Corporation (NASDAQ:TOUR) can tell us which group is most powerful. With 33% stake, private companies possess the maximum shares in the company. Put another way, the group faces the maximum upside potential (or downside risk).
As a result, private companies as a group endured the highest losses last week after market cap fell by US$15m.
In the chart below, we zoom in on the different ownership groups of Tuniu.
NasdaqGM:TOUR Ownership Breakdown November 19th 2024
What Does The Institutional Ownership Tell Us About Tuniu?
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 Tuniu. 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. 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 Tuniu's historic earnings and revenue below, but keep in mind there's always more to the story.
NasdaqGM:TOUR Earnings and Revenue Growth November 19th 2024
It would appear that 13% of Tuniu shares are controlled by hedge funds. That's interesting, because hedge funds can be quite active and activist. Many look for medium term catalysts that will drive the share price higher. BHR Winwood Investment Management Ltd is currently the largest shareholder, with 24% of shares outstanding. In comparison, the second and third largest shareholders hold about 21% and 13% of the stock. Additionally, the company's CEO Dunde Yu directly holds 3.8% of the total shares outstanding.
After doing some more digging, we found that the top 3 shareholders collectively control more than half of the company's shares, implying that they have considerable power to influence the company's decisions.
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 Tuniu
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.
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 can see that insiders own shares in Tuniu Corporation. In their own names, insiders own US$10m worth of stock in the US$128m company. It is good to see some investment by insiders, but we usually like to see higher insider holdings. It might be worth checking if those insiders have been buying.
General Public Ownership
With a 10% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Tuniu. This size of ownership, while considerable, may not be enough to change company policy if the decision is not in sync with other large shareholders.
Private Company Ownership
Our data indicates that Private Companies hold 33%, of the company's shares. 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.
Public Company Ownership
We can see that public companies hold 24% of the Tuniu shares on issue. It's hard to say for sure but this suggests they have entwined business interests. This might be a strategic stake, so it's worth watching this space for changes in ownership.
Next Steps:
While it is well worth considering the different groups that own a company, there are other factors that are even more important. For instance, we've identified 1 warning sign for Tuniu that you should be aware of.
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.
