Dongyue Group Limited's (HKG:189) market cap surged HK$1.6b last week, individual investors who have a lot riding on the company were rewarded

Key Insights

• Significant control over Dongyue Group by individual investors implies that the general public has more power to influence management and governance-related decisions
• The top 25 shareholders own 50% of the company
• Insider ownership in Dongyue Group is 12%

To get a sense of who is truly in control of Dongyue Group Limited (HKG:189), it is important to understand the ownership structure of the business. The group holding the most number of shares in the company, around 49% to be precise, is individual investors. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

Clearly, individual investors benefitted the most after the company's market cap rose by HK$1.6b last week.

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

See our latest analysis for Dongyue Group

What Does The Institutional Ownership Tell Us About Dongyue Group?

Institutional investors commonly compare their own returns to the returns of a commonly followed index. So they generally do consider buying larger companies that are included in the relevant benchmark index.

We can see that Dongyue Group does have institutional investors; and they hold a good portion of the company's stock. 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 Dongyue Group's earnings history below. Of course, the future is what really matters.

We note that hedge funds don't have a meaningful investment in Dongyue Group. Looking at our data, we can see that the largest shareholder is Macro Link Sdn Bhd. with 23% of shares outstanding. Meanwhile, the second and third largest shareholders, hold 12% and 4.8%, of the shares outstanding, respectively. Jianhong Zhang, who is the second-largest shareholder, also happens to hold the title of Chief Executive Officer.

A deeper look at our ownership data shows that the top 25 shareholders collectively hold less than half of the register, suggesting a large group of small holders where no single shareholder has a majority.

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. There are a reasonable number of analysts covering the stock, so it might be useful to find out their aggregate view on the future.

Insider Ownership Of Dongyue Group

While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. 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.

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.

It seems insiders own a significant proportion of Dongyue Group Limited. It has a market capitalization of just HK$14b, and insiders have HK$1.6b worth of shares in their own names. That's quite significant. Most would say this shows a good degree of alignment with shareholders, especially in a company of this size. You can click here to see if those insiders have been buying or selling.

General Public Ownership

The general public, who are usually individual investors, hold a 49% stake in Dongyue Group. 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 23%, 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 instance, we've identified 2 warning signs for Dongyue Group that you should be aware of.

If you would prefer discover what analysts are predicting in terms of future growth, do not miss this free report on analyst forecasts.

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.