Zhejiang Dingli Machinery Co.,Ltd (SHSE:603338) insiders have significant skin in the game with 47% ownership

Key Insights

• Zhejiang Dingli MachineryLtd's significant insider ownership suggests inherent interests in company's expansion
• 56% of the business is held by the top 2 shareholders
• Institutional ownership in Zhejiang Dingli MachineryLtd is 21%

To get a sense of who is truly in control of Zhejiang Dingli Machinery Co.,Ltd (SHSE:603338), it is important to understand the ownership structure of the business. The group holding the most number of shares in the company, around 47% to be precise, is individual insiders. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

With such a notable stake in the company, insiders would be highly incentivised to make value accretive decisions.

Let's delve deeper into each type of owner of Zhejiang Dingli MachineryLtd, beginning with the chart below.

Check out our latest analysis for Zhejiang Dingli MachineryLtd

What Does The Institutional Ownership Tell Us About Zhejiang Dingli MachineryLtd?

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.

We can see that Zhejiang Dingli MachineryLtd does have institutional investors; and they hold a good portion of the company's stock. 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 Dingli MachineryLtd, (below). Of course, keep in mind that there are other factors to consider, too.

Zhejiang Dingli MachineryLtd is not owned by hedge funds. Shu Gen Xu is currently the company's largest shareholder with 46% of shares outstanding. With 11% and 2.1% of the shares outstanding respectively, Deqing Zhongding Equity Investment Management Co., Ltd. and JP Morgan Asset Management are the second and third largest shareholders.

A more detailed study of the shareholder registry showed us that 2 of the top shareholders have a considerable amount of ownership in the company, via their 56% stake.

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. Quite a few analysts cover the stock, so you could look into forecast growth quite easily.

Insider Ownership Of Zhejiang Dingli MachineryLtd

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.

Insider ownership is positive when it signals leadership are thinking like the true owners of the company. However, high insider ownership can also give immense power to a small group within the company. This can be negative in some circumstances.

It seems insiders own a significant proportion of Zhejiang Dingli Machinery Co.,Ltd. It is very interesting to see that insiders have a meaningful CN¥16b stake in this CN¥34b business. Most would be pleased to see the board is investing alongside them. You may wish to access this free chart showing recent trading by insiders.

General Public Ownership

The general public-- including retail investors -- own 21% stake in the company, and hence can't easily be ignored. 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

We can see that Private Companies own 11%, 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 Zhejiang Dingli MachineryLtd better, we need to consider many other factors. Consider risks, for instance. Every company has them, and we've spotted 1 warning sign for Zhejiang Dingli MachineryLtd you should know about.

Ultimately the future is most important. You can access this free report on analyst forecasts for the company.

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.