Key Insights

• Significant control over Dongguan Dingtong Precision Metal by private companies implies that the general public has more power to influence management and governance-related decisions
• A total of 5 investors have a majority stake in the company with 52% ownership
• 28% of Dongguan Dingtong Precision Metal is held by Institutions

A look at the shareholders of Dongguan Dingtong Precision Metal Co., Ltd. (SHSE:688668) can tell us which group is most powerful. With 45% stake, private companies possess the maximum shares in the company. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

While the holdings of private companies took a hit after last week's 11% price drop, institutions with their 28% holdings also suffered.

Let's delve deeper into each type of owner of Dongguan Dingtong Precision Metal, beginning with the chart below.

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

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 Dongguan Dingtong Precision Metal. 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. 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 Dingtong Precision Metal's historic earnings and revenue below, but keep in mind there's always more to the story.

We note that hedge funds don't have a meaningful investment in Dongguan Dingtong Precision Metal. The company's largest shareholder is Dongguan Dinghong Junsheng Investment Co., Ltd., with ownership of 39%. GF Fund Management Co., Ltd. is the second largest shareholder owning 3.8% of common stock, and Chenghai Wang holds about 3.7% of the company stock. Chenghai Wang, who is the third-largest shareholder, also happens to hold the title of Chairman of the Board.

On looking further, we found that 52% of the shares are owned by the top 5 shareholders. In other words, these shareholders have a meaningful say in the decisions of the company.

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 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 Dongguan Dingtong Precision Metal

While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. 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.

We can see that insiders own shares in Dongguan Dingtong Precision Metal Co., Ltd.. It has a market capitalization of just CN¥5.7b, and insiders have CN¥221m worth of shares, in their own names. This shows at least some alignment. You can click here to see if those insiders have been buying or selling.

General Public Ownership

The general public, who are usually individual investors, hold a 24% stake in Dongguan Dingtong Precision Metal. 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

It seems that Private Companies own 45%, of the Dongguan Dingtong Precision Metal stock. It might be worth looking deeper into this. If related parties, such as insiders, have an interest in one of these private companies, that should be disclosed in the annual report. Private companies may also have a strategic interest in the 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. Case in point: We've spotted 2 warning signs for Dongguan Dingtong Precision Metal you should be aware of.

If you would prefer discover what analysts are predicting in terms of future growth, do not miss this free report on analyst forecasts.

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.