Key Insights

• The considerable ownership by private companies in DeHua TB New Decoration MaterialLtd indicates that they collectively have a greater say in management and business strategy
• The top 4 shareholders own 51% of the company
• Institutional ownership in DeHua TB New Decoration MaterialLtd is 11%

A look at the shareholders of DeHua TB New Decoration Material Co.,Ltd (SZSE:002043) can tell us which group is most powerful. And the group that holds the biggest piece of the pie are private companies with 37% ownership. Put another way, the group faces the maximum upside potential (or downside risk).

And last week, private companies endured the biggest losses as the stock fell by 3.7%.

In the chart below, we zoom in on the different ownership groups of DeHua TB New Decoration MaterialLtd.

What Does The Institutional Ownership Tell Us About DeHua TB New Decoration MaterialLtd?

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 DeHua TB New Decoration MaterialLtd. 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. If multiple institutions change their view on a stock at the same time, you could see the share price drop fast. It's therefore worth looking at DeHua TB New Decoration MaterialLtd's earnings history below. Of course, the future is what really matters.

We note that hedge funds don't have a meaningful investment in DeHua TB New Decoration MaterialLtd. Looking at our data, we can see that the largest shareholder is Dehua Group Holding Co., Ltd. with 37% of shares outstanding. In comparison, the second and third largest shareholders hold about 6.2% and 5.1% of the stock. Furthermore, CEO Lihua Lu is the owner of 0.7% of the company's shares.

Our research also brought to light the fact that roughly 51% 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 are a reasonable number of analysts covering the stock, so it might be useful to find out their aggregate view on the future.

Insider Ownership Of DeHua TB New Decoration MaterialLtd

The definition of an insider can differ slightly between different countries, but members of the board of directors always count. 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.

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 some shares in DeHua TB New Decoration Material Co.,Ltd. The insiders have a meaningful stake worth CN¥712m. Most would see this as a real positive. Most would say this shows alignment of interests between shareholders and the board. Still, it might be worth checking if those insiders have been selling.

General Public Ownership

With a 33% ownership, the general public, mostly comprising of individual investors, have some degree of sway over DeHua TB New Decoration MaterialLtd. 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 6.2%, private equity firms could influence the DeHua TB New Decoration MaterialLtd board. Some investors might be encouraged by this, since private equity are sometimes able to encourage strategies that help the market see the value in the company. Alternatively, those holders might be exiting the investment after taking it public.

Private Company Ownership

We can see that Private Companies own 37%, of the shares on issue. 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:

I find it very interesting to look at who exactly owns a company. But to truly gain insight, we need to consider other information, too. Consider risks, for instance. Every company has them, and we've spotted 1 warning sign for DeHua TB New Decoration MaterialLtd you should know about.

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.