Zhejiang Dahua Technology Co., Ltd. (SZSE:002236) insiders have significant skin in the game with 41% ownership

Key Insights

• Insiders appear to have a vested interest in Zhejiang Dahua Technology's growth, as seen by their sizeable ownership
• The top 6 shareholders own 51% of the company
• Institutions own 16% of Zhejiang Dahua Technology

Every investor in Zhejiang Dahua Technology Co., Ltd. (SZSE:002236) should be aware of the most powerful shareholder groups. And the group that holds the biggest piece of the pie are individual insiders with 41% ownership. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

So it follows, every decision made by insiders of Zhejiang Dahua Technology regarding the company's future would be crucial to them.

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

Check out our latest analysis for Zhejiang Dahua Technology

What Does The Institutional Ownership Tell Us About Zhejiang Dahua Technology?

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.

As you can see, institutional investors have a fair amount of stake in Zhejiang Dahua Technology. This can indicate that the company has a certain degree of credibility in the investment community. However, it is best to be wary of relying on the supposed validation that comes with institutional investors. They too, get it wrong sometimes. 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 Zhejiang Dahua Technology's earnings history below. Of course, the future is what really matters.

We note that hedge funds don't have a meaningful investment in Zhejiang Dahua Technology. Looking at our data, we can see that the largest shareholder is the CEO Liquan Fu with 31% of shares outstanding. With 9.0% and 4.9% of the shares outstanding respectively, China Mobile Communications Group Co., Ltd. and Jiangming Zhu are the second and third largest shareholders.

We did some more digging and found that 6 of the top shareholders account for roughly 51% of the register, implying that along with larger shareholders, there are a few smaller shareholders, thereby balancing out each others interests somewhat.

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 Zhejiang Dahua Technology

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.

It seems insiders own a significant proportion of Zhejiang Dahua Technology Co., Ltd.. It is very interesting to see that insiders have a meaningful CN¥22b stake in this CN¥54b business. 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 34% stake in Zhejiang Dahua Technology. 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 9.0%, of the company's shares. 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.

Next Steps:

While it is well worth considering the different groups that own a company, there are other factors that are even more important. Case in point: We've spotted 2 warning signs for Zhejiang Dahua Technology you should be aware of, and 1 of them is a bit unpleasant.

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.