Key Insights

• The considerable ownership by private companies in ZHEJIANG DIBAY ELECTRICLtd 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 65% ownership
• Insiders own 18% of ZHEJIANG DIBAY ELECTRICLtd

Every investor in ZHEJIANG DIBAY ELECTRIC CO.,Ltd. (SHSE:603320) should be aware of the most powerful shareholder groups. We can see that private companies own the lion's share in the company with 50% ownership. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

As a result, private companies were the biggest beneficiaries of last week's 31% gain.

Let's take a closer look to see what the different types of shareholders can tell us about ZHEJIANG DIBAY ELECTRICLtd.

What Does The Institutional Ownership Tell Us About ZHEJIANG DIBAY ELECTRICLtd?

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 ZHEJIANG DIBAY ELECTRICLtd. 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 ZHEJIANG DIBAY ELECTRICLtd, (below). Of course, keep in mind that there are other factors to consider, too.

We note that hedge funds don't have a meaningful investment in ZHEJIANG DIBAY ELECTRICLtd. Dibay Holdings Co., Ltd. is currently the company's largest shareholder with 49% of shares outstanding. Meanwhile, the second and third largest shareholders, hold 16% and 1.4%, of the shares outstanding, respectively. Jianrong Wu, who is the third-largest shareholder, also happens to hold the title of Chairman of the Board.

After doing some more digging, we found that the top 2 shareholders collectively control more than half of the company's shares, implying that they have considerable power to influence the company's decisions.

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. 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 ZHEJIANG DIBAY ELECTRICLtd

While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. Management ultimately answers to the board. However, it is not uncommon for managers to be executive board members, especially if they are a founder or the CEO.

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 ZHEJIANG DIBAY ELECTRIC CO.,Ltd.. It has a market capitalization of just CN¥2.4b, and insiders have CN¥429m worth of shares in their own names. It is great to see insiders so invested in the business. It might be worth checking if those insiders have been buying recently.

General Public Ownership

The general public-- including retail investors -- own 27% 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

Our data indicates that Private Companies hold 50%, of the company's shares. 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.

Many find it useful to take an in depth look at how a company has performed in the past. You can access this detailed graph of past earnings, revenue and cash flow.

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.