Zhejiang Red Dragonfly Footwear Co., Ltd.'s (SHSE:603116) largest shareholders are private companies who were rewarded as market cap surged CN¥534m last week

Key Insights

• The considerable ownership by private companies in Zhejiang Red Dragonfly Footwear 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 54% ownership
• Insider ownership in Zhejiang Red Dragonfly Footwear is 20%

To get a sense of who is truly in control of Zhejiang Red Dragonfly Footwear Co., Ltd. (SHSE:603116), 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 private companies. Put another way, the group faces the maximum upside potential (or downside risk).

Clearly, private companies benefitted the most after the company's market cap rose by CN¥534m last week.

Let's take a closer look to see what the different types of shareholders can tell us about Zhejiang Red Dragonfly Footwear.

Check out our latest analysis for Zhejiang Red Dragonfly Footwear

What Does The Institutional Ownership Tell Us About Zhejiang Red Dragonfly Footwear?

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.

Since institutions own only a small portion of Zhejiang Red Dragonfly Footwear, many may not have spent much time considering the stock. But it's clear that some have; and they liked it enough to buy in. If the business gets stronger from here, we could see a situation where more institutions are keen to buy. We sometimes see a rising share price when a few big institutions want to buy a certain stock at the same time. The history of earnings and revenue, which you can see below, could be helpful in considering if more institutional investors will want the stock. Of course, there are plenty of other factors to consider, too.

Zhejiang Red Dragonfly Footwear is not owned by hedge funds. Looking at our data, we can see that the largest shareholder is Red Dragonfly Group Co., Ltd. with 44% of shares outstanding. In comparison, the second and third largest shareholders hold about 9.9% and 3.7% of the stock. Yinkuan Jin, who is the third-largest shareholder, also happens to hold the title of Member of the Board of Directors.

To make our study more interesting, we found that the top 2 shareholders have a majority ownership in the company, meaning that they are powerful enough to influence the decisions of the company.

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. Our information suggests that there isn't any analyst coverage of the stock, so it is probably little known.

Insider Ownership Of Zhejiang Red Dragonfly Footwear

The definition of an insider can differ slightly between different countries, but members of the board of directors always count. 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.

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 most recent data indicates that insiders own a reasonable proportion of Zhejiang Red Dragonfly Footwear Co., Ltd.. It has a market capitalization of just CN¥4.4b, and insiders have CN¥889m worth of shares in their own names. 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, who are usually individual investors, hold a 30% stake in Zhejiang Red Dragonfly Footwear. 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 44%, of the company's shares. 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:

While it is well worth considering the different groups that own a company, there are other factors that are even more important. Consider risks, for instance. Every company has them, and we've spotted 2 warning signs for Zhejiang Red Dragonfly Footwear you should know about.

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.