Key Insights

• The considerable ownership by private companies in Dongguan Dingtong Precision Metal indicates that they collectively have a greater say in management and business strategy
• The top 3 shareholders own 53% of the company
• Institutional ownership in Dongguan Dingtong Precision Metal is 29%

Every investor in Dongguan Dingtong Precision Metal Co., Ltd. (SHSE:688668) should be aware of the most powerful shareholder groups. We can see that private companies own the lion's share in the company with 46% ownership. Put another way, the group faces the maximum upside potential (or downside risk).

Private companies gained the most after market cap touched CN¥5.9b last week, while institutions who own 29% also benefitted.

Let's take a closer look to see what the different types of shareholders can tell us about Dongguan Dingtong Precision Metal.

What Does The Institutional Ownership Tell Us About Dongguan Dingtong Precision Metal?

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.

Dongguan Dingtong Precision Metal already has institutions on the share registry. Indeed, they own a respectable stake in the company. 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. 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 Dongguan Dingtong Precision Metal, (below). Of course, keep in mind that there are other factors to consider, too.

Hedge funds don't have many shares in Dongguan Dingtong Precision Metal. Dongguan Dinghong Junsheng Investment Co., Ltd. is currently the largest shareholder, with 39% of shares outstanding. With 9.6% and 3.8% of the shares outstanding respectively, Chenghai Wang and GF Fund Management Co., Ltd. are the second and third largest shareholders. Chenghai Wang, who is the second-largest shareholder, also happens to hold the title of Chief Executive Officer.

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 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. There are plenty of analysts covering the stock, so it might be worth seeing what they are forecasting, too.

Insider Ownership Of Dongguan Dingtong Precision Metal

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 most recent data indicates that insiders own some shares in Dongguan Dingtong Precision Metal Co., Ltd.. In their own names, insiders own CN¥578m worth of stock in the CN¥5.9b company. Some would say this shows alignment of interests between shareholders and the board. But it might be worth checking if those insiders have been selling.

General Public Ownership

With a 15% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Dongguan Dingtong Precision Metal. 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 Company Ownership

Our data indicates that Private Companies hold 46%, 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.

Next Steps:

While it is well worth considering the different groups that own a company, there are other factors that are even more important. Case in point: We've spotted 4 warning signs for Dongguan Dingtong Precision Metal you should be aware of, and 2 of them are concerning.

But ultimately it is the future, not the past, that will determine how well the owners of this business will do. Therefore we think it advisable to take a look at this free report showing whether analysts are predicting a brighter 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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com