ZHEJIANG DIBAY ELECTRIC CO.,Ltd.'s (SHSE:603320) biggest owners are private companies who got richer after stock soared 16% last week

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
• 50% of the company is held by a single shareholder (Dibay Holdings Co., Ltd.)
• 18% of ZHEJIANG DIBAY ELECTRICLtd is held by insiders

If you want to know who really controls ZHEJIANG DIBAY ELECTRIC CO.,Ltd. (SHSE:603320), then you'll have to look at the makeup of its share registry. And the group that holds the biggest piece of the pie are private companies with 50% ownership. Put another way, the group faces the maximum upside potential (or downside risk).

As a result, private companies were the biggest beneficiaries of last week’s 16% gain.

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

Check out our latest analysis for 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. 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 ZHEJIANG DIBAY ELECTRICLtd's historic earnings and revenue below, but keep in mind there's always more to the story.

ZHEJIANG DIBAY ELECTRICLtd is not owned by hedge funds. Dibay Holdings Co., Ltd. is currently the largest shareholder, with 50% of shares outstanding. This implies that they have majority interest control of the future of the company. With 16% and 1.1% of the shares outstanding respectively, Chu Zheng Wu and Jianrong Wu are the second and third largest shareholders. Jianrong Wu, who is the third-largest shareholder, also happens to hold the title of Chairman of the Board.

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. 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 ZHEJIANG DIBAY ELECTRICLtd

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.

Most consider insider ownership a positive because it can indicate the board is well aligned with other shareholders. However, on some occasions too much power is concentrated within this group.

Our information suggests that insiders maintain a significant holding in ZHEJIANG DIBAY ELECTRIC CO.,Ltd.. Insiders own CN¥385m worth of shares in the CN¥2.2b company. 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, who are usually individual investors, hold a 26% stake in ZHEJIANG DIBAY ELECTRICLtd. 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

It seems that Private Companies own 50%, of the ZHEJIANG DIBAY ELECTRICLtd stock. 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 ZHEJIANG DIBAY ELECTRICLtd better, we need to consider many other factors. Be aware that ZHEJIANG DIBAY ELECTRICLtd is showing 2 warning signs in our investment analysis , and 1 of those can't be ignored...

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.

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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.

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