TH International's significant private equity firms ownership suggests that the key decisions are influenced by shareholders from the larger public
52% of the company is held by a single shareholder (Cartesian Capital Group, LLC)
Using data from company's past performance alongside ownership research, one can better assess the future performance of a company
Every investor in TH International Limited (NASDAQ:THCH) should be aware of the most powerful shareholder groups. The group holding the most number of shares in the company, around 69% to be precise, is private equity firms. Put another way, the group faces the maximum upside potential (or downside risk).
Public companies, on the other hand, account for 13% of the company's stockholders.
Let's take a closer look to see what the different types of shareholders can tell us about TH International.
NasdaqCM:THCH Ownership Breakdown January 13th 2025
What Does The Institutional Ownership Tell Us About TH International?
Many institutions measure their performance against an index that approximates the local market. So they usually pay more attention to companies that are included in major indices.
Less than 5% of TH International is held by institutional investors. This suggests that some funds have the company in their sights, but many have not yet bought shares in it. So if the company itself can improve over time, we may well see more institutional buyers in the future. We sometimes see a rising share price when a few big institutions want to buy a certain stock at the same time. The history of earnings and revenue, which you can see below, could be helpful in considering if more institutional investors will want the stock. Of course, there are plenty of other factors to consider, too.
NasdaqCM:THCH Earnings and Revenue Growth January 13th 2025
We note that hedge funds don't have a meaningful investment in TH International. The company's largest shareholder is Cartesian Capital Group, LLC, with ownership of 52%. This essentially means that they have extensive influence, if not outright control, over the future of the corporation. Tencent Holdings Limited is the second largest shareholder owning 13% of common stock, and HongShan holds about 9.2% of the company stock. In addition, we found that Yongchen Lu, the CEO has 0.9% of the shares allocated to their name.
While studying institutional ownership for a company can add value to your research, it is also a good practice to research analyst recommendations to get a deeper understand of a stock's expected performance. We're not picking up on any analyst coverage of the stock at the moment, so the company is unlikely to be widely held.
Insider Ownership Of TH International
While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. 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 TH International Limited insiders own under 1% of the company. But they may have an indirect interest through a corporate structure that we haven't picked up on. It appears that the board holds about US$953k worth of stock. This compares to a market capitalization of US$105m. We generally like to see a board more invested. However it might be worth checking if those insiders have been buying.
General Public Ownership
The general public-- including retail investors -- own 11% 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.
Private Equity Ownership
With a stake of 69%, private equity firms could influence the TH International board. Some might like this, because private equity are sometimes activists who hold management accountable. But other times, private equity is selling out, having taking the company public.
Private Company Ownership
Our data indicates that Private Companies hold 4.9%, of the company's shares. Private companies may be related parties. Sometimes insiders have an interest in a public company through a holding in a private company, rather than in their own capacity as an individual. While it's hard to draw any broad stroke conclusions, it is worth noting as an area for further research.
Public Company Ownership
Public companies currently own 13% of TH International stock. We can't be certain but it is quite possible this is a strategic stake. The businesses may be similar, or work together.
Next Steps:
It's always worth thinking about the different groups who own shares in a company. But to understand TH International better, we need to consider many other factors. Case in point: We've spotted 4 warning signs for TH International you should be aware of, and 3 of them can't be ignored.
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this freelist 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.
