Key Insights

• Zhejiang Dahua Technology's significant insider ownership suggests inherent interests in company's expansion
• 51% of the business is held by the top 6 shareholders
• Institutions own 16% of Zhejiang Dahua Technology

To get a sense of who is truly in control of Zhejiang Dahua Technology Co., Ltd. (SZSE:002236), it is important to understand the ownership structure of the business. With 41% stake, individual insiders possess the maximum shares in the company. Put another way, the group faces the maximum upside potential (or downside risk).

So, insiders of Zhejiang Dahua Technology have a lot at stake and every decision they make on the company's future is important to them from a financial point of view.

In the chart below, we zoom in on the different ownership groups of Zhejiang Dahua Technology.

What Does The Institutional Ownership Tell Us About Zhejiang Dahua Technology?

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.

Zhejiang Dahua Technology already has institutions on the share registry. Indeed, they own a respectable stake in the company. This suggests some credibility amongst professional investors. But we can't rely on that fact alone since institutions make bad investments sometimes, just like everyone does. 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 Zhejiang Dahua Technology, (below). Of course, keep in mind that there are other factors to consider, too.

Zhejiang Dahua Technology is not owned by hedge funds. Looking at our data, we can see that the largest shareholder is the CEO Liquan Fu with 31% of shares outstanding. China Mobile Communications Group Co., Ltd. is the second largest shareholder owning 9.0% of common stock, and Jiangming Zhu holds about 4.9% of the company stock.

We also observed that the top 6 shareholders account for more than half of the share register, with a few smaller shareholders to balance the interests of the larger ones to a certain extent.

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. Quite a few analysts cover the stock, so you could look into forecast growth quite easily.

Insider Ownership Of Zhejiang Dahua Technology

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.

Our most recent data indicates that insiders own a reasonable proportion of Zhejiang Dahua Technology Co., Ltd.. It has a market capitalization of just CN¥57b, and insiders have CN¥23b worth of shares in their own names. That's quite significant. Most would say this shows a good degree of alignment with shareholders, especially in a company of this size. You can click here to see if those insiders have been buying or selling.

General Public Ownership

The general public-- including retail investors -- own 34% 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 Company Ownership

Our data indicates that Private Companies hold 9.0%, 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.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand Zhejiang Dahua Technology better, we need to consider many other factors. Be aware that Zhejiang Dahua Technology is showing 2 warning signs in our investment analysis , and 1 of those is a bit concerning...

If you are like me, you may want to think about whether this company will grow or shrink. Luckily, you can check this free report showing analyst forecasts for its 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.