Key Insights

• The considerable ownership by private companies in Dongguan Chitwing Technology indicates that they collectively have a greater say in management and business strategy
• A total of 2 investors have a majority stake in the company with 55% ownership
• Institutions own 11% of Dongguan Chitwing Technology

To get a sense of who is truly in control of Dongguan Chitwing Technology Co., Ltd. (SZSE:002855), it is important to understand the ownership structure of the business. We can see that private companies own the lion's share in the company with 55% ownership. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

As a result, private companies collectively scored the highest last week as the company hit CN¥5.4b market cap following a 14% gain in the stock.

Let's delve deeper into each type of owner of Dongguan Chitwing Technology, beginning with the chart below.

What Does The Institutional Ownership Tell Us About Dongguan Chitwing 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.

We can see that Dongguan Chitwing Technology does have institutional investors; and they hold a good portion of the company's stock. This can indicate that the company has a certain degree of credibility in the investment community. However, it is best to be wary of relying on the supposed validation that comes with institutional investors. They too, get it wrong sometimes. 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 Dongguan Chitwing Technology's historic earnings and revenue below, but keep in mind there's always more to the story.

Hedge funds don't have many shares in Dongguan Chitwing Technology. Looking at our data, we can see that the largest shareholder is Chit Wing Technology Group Company Limited with 43% of shares outstanding. For context, the second largest shareholder holds about 12% of the shares outstanding, followed by an ownership of 8.1% by the third-largest shareholder.

To make our study more interesting, we found that the top 2 shareholders have a majority ownership in the company, meaning that they are powerful enough to influence the decisions of the company.

Researching institutional ownership is a good way to gauge and filter a stock's expected performance. The same can be achieved by studying analyst sentiments. As far as we can tell there isn't analyst coverage of the company, so it is probably flying under the radar.

Insider Ownership Of Dongguan Chitwing 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.

I generally consider insider ownership to be a good thing. However, on some occasions it makes it more difficult for other shareholders to hold the board accountable for decisions.

Our most recent data indicates that insiders own less than 1% of Dongguan Chitwing Technology Co., Ltd.. However, it's possible that insiders might have an indirect interest through a more complex structure. It has a market capitalization of just CN¥5.4b, and the board has only CN¥5.6m worth of shares in their own names. 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 32% 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 55%, 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:

It's always worth thinking about the different groups who own shares in a company. But to understand Dongguan Chitwing Technology better, we need to consider many other factors. Like risks, for instance. Every company has them, and we've spotted 3 warning signs for Dongguan Chitwing Technology (of which 2 are significant!) you should know about.

Of course this may not be the best stock to buy. So take a peek at this free free list 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.

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