Key Insights

• Significant control over Daodaoquan Grain and OilLtd by individual investors implies that the general public has more power to influence management and governance-related decisions
• The top 23 shareholders own 50% of the company
• Insiders own 40% of Daodaoquan Grain and OilLtd

To get a sense of who is truly in control of Daodaoquan Grain and Oil Co.,Ltd. (SZSE:002852), it is important to understand the ownership structure of the business. The group holding the most number of shares in the company, around 50% to be precise, is individual investors. Put another way, the group faces the maximum upside potential (or downside risk).

Individual investors gained the most after market cap touched CN¥3.1b last week, while insiders who own 40% also benefitted.

Let's take a closer look to see what the different types of shareholders can tell us about Daodaoquan Grain and OilLtd.

What Does The Institutional Ownership Tell Us About Daodaoquan Grain and OilLtd?

Institutions typically measure themselves against a benchmark when reporting to their own investors, so they often become more enthusiastic about a stock once it's included in a major index. We would expect most companies to have some institutions on the register, especially if they are growing.

As you can see, institutional investors have a fair amount of stake in Daodaoquan Grain and OilLtd. 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. 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 Daodaoquan Grain and OilLtd's earnings history below. Of course, the future is what really matters.

Hedge funds don't have many shares in Daodaoquan Grain and OilLtd. Looking at our data, we can see that the largest shareholder is the CEO Jian Jun Liu with 34% of shares outstanding. With 4.1% and 2.4% of the shares outstanding respectively, Guangdong Hengkuo Investment Management Co., Ltd. and Rong Jiang are the second and third largest shareholders.

After doing some more digging, we found that the top 23 have the combined ownership of 50% in the company, suggesting that no single shareholder has significant control over the company.

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. We're not picking up on any analyst coverage of the stock at the moment, so the company is unlikely to be widely held.

Insider Ownership Of Daodaoquan Grain and OilLtd

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.

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.

It seems insiders own a significant proportion of Daodaoquan Grain and Oil Co.,Ltd.. Insiders have a CN¥1.3b stake in this CN¥3.1b business. We would say this shows alignment with shareholders, but it is worth noting that the company is still quite small; some insiders may have founded the business. You can click here to see if those insiders have been buying or selling.

General Public Ownership

The general public-- including retail investors -- own 50% stake in the company, and hence can't easily be ignored. This size of ownership, while considerable, may not be enough to change company policy if the decision is not in sync with other large shareholders.

Next Steps:

While it is well worth considering the different groups that own a company, there are other factors that are even more important. For example, we've discovered 4 warning signs for Daodaoquan Grain and OilLtd (1 is potentially serious!) that you should be aware of before investing here.

If you would prefer check out another company -- one with potentially superior financials -- then do not miss this free list of interesting companies, backed by strong financial data.

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.