Dajin Heavy Industry Co.,Ltd.'s (SZSE:002487) stock price dropped 4.2% last week; private companies would not be happy

Key Insights

• The considerable ownership by private companies in Dajin Heavy IndustryLtd indicates that they collectively have a greater say in management and business strategy
• 50% of the business is held by the top 8 shareholders
• Institutions own 21% of Dajin Heavy IndustryLtd

If you want to know who really controls Dajin Heavy Industry Co.,Ltd. (SZSE:002487), then you'll have to look at the makeup of its share registry. The group holding the most number of shares in the company, around 40% to be precise, is private companies. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

And last week, private companies endured the biggest losses as the stock fell by 4.2%.

Let's delve deeper into each type of owner of Dajin Heavy IndustryLtd, beginning with the chart below.

See our latest analysis for Dajin Heavy IndustryLtd

What Does The Institutional Ownership Tell Us About Dajin Heavy IndustryLtd?

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.

Dajin Heavy IndustryLtd already has institutions on the share registry. Indeed, they own a respectable stake in the company. 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. 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 Dajin Heavy IndustryLtd's earnings history below. Of course, the future is what really matters.

We note that hedge funds don't have a meaningful investment in Dajin Heavy IndustryLtd. Looking at our data, we can see that the largest shareholder is Fuxin Jinyin Energy Investment Co., Ltd. with 39% of shares outstanding. With 2.8% and 2.7% of the shares outstanding respectively, Manulife Asset Management and CCB Principal Asset Management Co., Ltd. are the second and third largest shareholders.

On further inspection, we found that more than half the company's shares are owned by the top 8 shareholders, suggesting that the interests of the larger shareholders are balanced out to an extent by the smaller ones.

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 Dajin Heavy IndustryLtd

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. 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.

Our most recent data indicates that insiders own some shares in Dajin Heavy Industry Co.,Ltd.. It is a pretty big company, so it is generally a positive to see some potentially meaningful alignment. In this case, they own around CN¥231m worth of shares (at current prices). If you would like to explore the question of insider alignment, you can click here to see if insiders have been buying or selling.

General Public Ownership

The general public, who are usually individual investors, hold a 38% stake in Dajin Heavy IndustryLtd. 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

Our data indicates that Private Companies hold 40%, of the company's shares. 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:

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 1 warning sign for Dajin Heavy IndustryLtd that you should be aware of before investing here.

If you are like me, you may want to think about whether this company will grow or shrink. Luckily, you can check this free report showing analyst forecasts for its future.

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.