Stock Analysis

What Kind Of Investors Own Most Of Dawnrays Pharmaceutical (Holdings) Limited (HKG:2348)?

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SEHK:2348
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Every investor in Dawnrays Pharmaceutical (Holdings) Limited (HKG:2348) should be aware of the most powerful shareholder groups. Generally speaking, as a company grows, institutions will increase their ownership. Conversely, insiders often decrease their ownership over time. 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.

Dawnrays Pharmaceutical (Holdings) is not a large company by global standards. It has a market capitalization of HK$1.8b, which means it wouldn't have the attention of many institutional investors. Our analysis of the ownership of the company, below, shows that institutional investors have bought into the company. We can zoom in on the different ownership groups, to learn more about Dawnrays Pharmaceutical (Holdings).

Check out our latest analysis for Dawnrays Pharmaceutical (Holdings)

ownership-breakdown
SEHK:2348 Ownership Breakdown December 10th 2020

What Does The Institutional Ownership Tell Us About Dawnrays Pharmaceutical (Holdings)?

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.

As you can see, institutional investors have a fair amount of stake in Dawnrays Pharmaceutical (Holdings). 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. It is not uncommon to see a big share price drop if two large institutional investors try to sell out of a stock at the same time. So it is worth checking the past earnings trajectory of Dawnrays Pharmaceutical (Holdings), (below). Of course, keep in mind that there are other factors to consider, too.

earnings-and-revenue-growth
SEHK:2348 Earnings and Revenue Growth December 10th 2020

We note that hedge funds don't have a meaningful investment in Dawnrays Pharmaceutical (Holdings). Looking at our data, we can see that the largest shareholder is Fortune United Group Limited with 39% of shares outstanding. Kei Ling Li is the second largest shareholder owning 7.0% of common stock, and Toyo International Investment Limited holds about 6.6% of the company stock. Kei Ling Li, who is the second-largest shareholder, also happens to hold the title of Top Key Executive. In addition, we found that Shaojun Chen, the CEO has 1.3% of the shares allocated to his name

After doing some more digging, we found that the top 3 shareholders collectively control more than half of the company's shares, implying that they have considerable power to influence the company's decisions.

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. As far I can tell there isn't analyst coverage of the company, so it is probably flying under the radar.

Insider Ownership Of Dawnrays Pharmaceutical (Holdings)

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. 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 Dawnrays Pharmaceutical (Holdings) Limited. It has a market capitalization of just HK$1.8b, and insiders have HK$256m worth of shares in their own names. I would say this shows alignment with shareholders, but it is worth noting that the company is still quite small; some insiders may have founded the business. You can click here to see if those insiders have been buying or selling.

General Public Ownership

The general public holds a 33% stake in Dawnrays Pharmaceutical (Holdings). 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 45%, 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. For instance, we've identified 3 warning signs for Dawnrays Pharmaceutical (Holdings) (1 is significant) that you should be aware of.

Of course this may not be the best stock to buy. Therefore, you may wish to see our free collection of interesting prospects boasting favorable financials.

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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