Private companies are De Rucci Healthy Sleep Co., Ltd.'s (SZSE:001323) biggest owners and were hit after market cap dropped CN¥408m

Key Insights

• Significant control over De Rucci Healthy Sleep by private companies implies that the general public has more power to influence management and governance-related decisions
• 56% of the business is held by the top 2 shareholders
• Insider ownership in De Rucci Healthy Sleep is 38%

Every investor in De Rucci Healthy Sleep Co., Ltd. (SZSE:001323) should be aware of the most powerful shareholder groups. With 44% stake, private companies possess the maximum shares in the company. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

Following a 3.4% decrease in the stock price last week, private companies suffered the most losses, but insiders who own 38% stock also took a hit.

Let's delve deeper into each type of owner of De Rucci Healthy Sleep, beginning with the chart below.

Check out our latest analysis for De Rucci Healthy Sleep

What Does The Institutional Ownership Tell Us About De Rucci Healthy Sleep?

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.

Institutions have a very small stake in De Rucci Healthy Sleep. That indicates that the company is on the radar of some funds, but it isn't particularly popular with professional investors at the moment. 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.

De Rucci Healthy Sleep is not owned by hedge funds. Dongguan Muteng Investment Co., Ltd. is currently the largest shareholder, with 37% of shares outstanding. The second and third largest shareholders are Bingkun Wang and Jiyong Lin, with an equal amount of shares to their name at 18%. Note that the second and third-largest shareholders are also Chief Executive Officer and Member of the Board of Directors, respectively, meaning that the company's top shareholders are insiders.

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.

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

Insider Ownership Of De Rucci Healthy Sleep

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.

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.

Our most recent data indicates that insiders own a reasonable proportion of De Rucci Healthy Sleep Co., Ltd.. Insiders own CN¥4.4b worth of shares in the CN¥12b company. That's quite meaningful. It is good to see this level of investment. You can check here to see if those insiders have been buying recently.

General Public Ownership

The general public, who are usually individual investors, hold a 10% stake in De Rucci Healthy Sleep. 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 44%, of the shares on issue. 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.

Public Company Ownership

It appears to us that public companies own 3.3% of De Rucci Healthy Sleep. We can't be certain but it is quite possible this is a strategic stake. The businesses may be similar, or work together.

Next Steps:

While it is well worth considering the different groups that own a company, there are other factors that are even more important.

I always like to check for a history of revenue growth. You can too, by accessing this free chart of historic revenue and earnings in this detailed graph.

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.

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