Dongwha Enterprise Co.,Ltd's (KOSDAQ:025900) largest shareholders are private companies who were rewarded as market cap surged ₩63b last week

Key Insights

• Dongwha EnterpriseLtd's significant private companies ownership suggests that the key decisions are influenced by shareholders from the larger public
• Dongwha International Co. Ltd owns 54% of the company
• 17% of Dongwha EnterpriseLtd is held by insiders

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To get a sense of who is truly in control of Dongwha Enterprise Co.,Ltd (KOSDAQ:025900), it is important to understand the ownership structure of the business. The group holding the most number of shares in the company, around 58% to be precise, is private companies. Put another way, the group faces the maximum upside potential (or downside risk).

As a result, private companies were the biggest beneficiaries of last week’s 15% gain.

In the chart below, we zoom in on the different ownership groups of Dongwha EnterpriseLtd.

See our latest analysis for Dongwha EnterpriseLtd

What Does The Lack Of Institutional Ownership Tell Us About Dongwha EnterpriseLtd?

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 could be various reasons why no institutions own shares in a company. Typically, small, newly listed companies don't attract much attention from fund managers, because it would not be possible for large fund managers to build a meaningful position in the company. It is also possible that fund managers don't own the stock because they aren't convinced it will perform well. Dongwha EnterpriseLtd might not have the sort of past performance institutions are looking for, or perhaps they simply have not studied the business closely.

Hedge funds don't have many shares in Dongwha EnterpriseLtd. Looking at our data, we can see that the largest shareholder is Dongwha International Co. Ltd with 54% of shares outstanding. This implies that they have majority interest control of the future of the company. Meanwhile, the second and third largest shareholders, hold 6.4% and 5.2%, of the shares outstanding, respectively. Myung-Ho Seung, who is the third-largest shareholder, also happens to hold the title of Chairman of the Board.

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

Insider Ownership Of Dongwha EnterpriseLtd

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.

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 Dongwha Enterprise Co.,Ltd. It has a market capitalization of just ₩475b, and insiders have ₩80b worth of shares in their own names. It is great to see insiders so invested in the business. It might be worth checking if those insiders have been buying recently.

General Public Ownership

The general public, who are usually individual investors, hold a 25% stake in Dongwha EnterpriseLtd. While this size of ownership may not be enough to sway a policy decision in their favour, they can still make a collective impact on company policies.

Private Company Ownership

We can see that Private Companies own 58%, 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.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand Dongwha EnterpriseLtd better, we need to consider many other factors. For example, we've discovered 2 warning signs for Dongwha EnterpriseLtd that you should be aware of before investing here.

Of course this may not be the best stock to buy. So take a peek at this free 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. 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.