Key Insights

• The considerable ownership by retail investors in Dagang Holding GroupLtd indicates that they collectively have a greater say in management and business strategy
• 51% of the business is held by the top 5 shareholders
• 31% of Dagang Holding GroupLtd is held by insiders

To get a sense of who is truly in control of Dagang Holding Group Co.,Ltd. (SZSE:300103), it is important to understand the ownership structure of the business. The group holding the most number of shares in the company, around 44% to be precise, is retail investors. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

Following a 15% decrease in the stock price last week, retail investors suffered the most losses, but insiders who own 31% stock also took a hit.

Let's take a closer look to see what the different types of shareholders can tell us about Dagang Holding GroupLtd.

What Does The Institutional Ownership Tell Us About Dagang Holding GroupLtd?

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 Dagang Holding GroupLtd does have institutional investors; and they hold a good portion of the company's stock. 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 Dagang Holding GroupLtd's historic earnings and revenue below, but keep in mind there's always more to the story.

Dagang Holding GroupLtd is not owned by hedge funds. The company's largest shareholder is Jianxi Sun, with ownership of 27%. Yingqi (Hangzhou) Enterprise Headquarters Management Co., Ltd. is the second largest shareholder owning 16% of common stock, and Shenzhen Lingtong Biotechnology Co., Ltd. holds about 4.5% of the company stock.

To make our study more interesting, we found that the top 5 shareholders control more than half of the company which implies that this group has considerable sway over the company's decision-making.

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. 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 Dagang Holding GroupLtd

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

Our information suggests that insiders maintain a significant holding in Dagang Holding Group Co.,Ltd.. Insiders have a CN¥677m stake in this CN¥2.2b business. This may suggest that the founders still own a lot of shares. You can click here to see if they have been buying or selling.

General Public Ownership

The general public-- including retail investors -- own 44% 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.

Private Company Ownership

We can see that Private Companies own 20%, 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:

It's always worth thinking about the different groups who own shares in a company. But to understand Dagang Holding GroupLtd better, we need to consider many other factors. Case in point: We've spotted 2 warning signs for Dagang Holding GroupLtd you should be aware of, and 1 of them is significant.

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.