Dongwha Enterprise Co.,Ltd's (KOSDAQ:025900) market cap surged ₩122b last week, private companies who have a lot riding on the company were rewarded

Key Insights

• Significant control over Dongwha EnterpriseLtd by private companies implies that the general public has more power to influence management and governance-related decisions
• 54% of the company is held by a single shareholder (Dongwha International Co. Ltd)
• Insider ownership in Dongwha EnterpriseLtd is 15%

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. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

Clearly, private companies benefitted the most after the company's market cap rose by ₩122b last week.

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

View 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 are multiple explanations for why institutions don't own a stock. The most common is that the company is too small relative to funds under management, so the institution does not bother to look closely at the company. Alternatively, there might be something about the company that has kept institutional investors away. Institutional investors may not find the historic growth of the business impressive, or there might be other factors at play. You can see the past revenue performance of Dongwha EnterpriseLtd, for yourself, below.

We note that hedge funds don't have a meaningful investment in Dongwha EnterpriseLtd. Dongwha International Co. Ltd is currently the largest shareholder, with 54% of shares outstanding. This essentially means that they have extensive influence, if not outright control, over the future of the corporation. With 6.4% and 5.2% of the shares outstanding respectively, Eun-Ho Seung and Myung-Ho Seung are the second and third largest shareholders. Myung-Ho Seung, who is the third-largest shareholder, also happens to hold the title of Chairman of the Board.

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 is a little analyst coverage of the stock, but not much. So there is room for it to gain more coverage.

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. 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.

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.

Our most recent data indicates that insiders own a reasonable proportion of Dongwha Enterprise Co.,Ltd. It has a market capitalization of just ₩495b, and insiders have ₩74b 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 26% 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

Our data indicates that Private Companies hold 58%, 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 2 warning signs for Dongwha EnterpriseLtd (1 is concerning) 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.