Here's What Precious Dragon Technology Holdings Limited's (HKG:1861) Shareholder Ownership Structure Looks Like

A look at the shareholders of Precious Dragon Technology Holdings Limited (HKG:1861) can tell us which group is most powerful. Insiders often own a large chunk of younger, smaller, companies while huge companies tend to have institutions as shareholders. I generally like to see some degree of insider ownership, even if only a little. As Nassim Nicholas Taleb said, 'Don’t tell me what you think, tell me what you have in your portfolio.

Precious Dragon Technology Holdings is a smaller company with a market capitalization of HK$780m, so it may still be flying under the radar of many institutional investors. In the chart below, we can see that institutions don't own shares in the company. Let's delve deeper into each type of owner, to discover more about Precious Dragon Technology Holdings.

See our latest analysis for Precious Dragon Technology Holdings

What Does The Lack Of Institutional Ownership Tell Us About Precious Dragon Technology Holdings?

Institutional investors often avoid companies that are too small, too illiquid or too risky for their tastes. But it's unusual to see larger companies without any institutional investors.

There are many reasons why a company might not have any institutions on the share registry. It may be hard for institutions to buy large amounts of shares, if liquidity (the amount of shares traded each day) is low. If the company has not needed to raise capital, institutions might lack the opportunity to build a position. It is also possible that fund managers don't own the stock because they aren't convinced it will perform well. Precious Dragon Technology Holdings might not have the sort of past performance institutions are looking for, or perhaps they simply have not studied the business closely.

We note that hedge funds don't have a meaningful investment in Precious Dragon Technology Holdings. Looking at our data, we can see that the largest shareholder is Wan Tsang Lin with 75% of shares outstanding. This essentially means that they have extensive influence, if not outright control, over the future of the corporation. Tak Ching Poon is the second largest shareholder, holding 0.2%.

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 Precious Dragon Technology Holdings

The definition of an insider can differ slightly between different countries, but members of the board of directors always count. Company management run the business, but the CEO will answer to the board, even if he or she is a member of it.

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 information suggests that insiders own more than half of Precious Dragon Technology Holdings Limited. This gives them effective control of the company. That means they own HK$585m worth of shares in the HK$780m 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, with a 25% stake in the company, will not easily be ignored. 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.

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 for instance, the ever-present spectre of investment risk. We've identified 3 warning signs with Precious Dragon Technology Holdings (at least 2 which don't sit too well with us) , and understanding them should be part of your investment process.

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this 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. 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.
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