Dongwha Enterprise Co.,Ltd's (KOSDAQ:025900) stock price dropped 13% last week; private companies would not be happy

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 17%

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A look at the shareholders of Dongwha Enterprise Co.,Ltd (KOSDAQ:025900) can tell us which group is most powerful. We can see that private companies own the lion's share in the company with 58% ownership. Put another way, the group faces the maximum upside potential (or downside risk).

As market cap fell to ₩410b last week, private companies would have faced the highest losses than any other shareholder groups of the company.

Let's delve deeper into each type of owner of Dongwha EnterpriseLtd, beginning with the chart below.

Check out our latest analysis for Dongwha EnterpriseLtd

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

We don't tend to see institutional investors holding stock of companies that are very risky, thinly traded, or very small. Though we do sometimes see large companies without institutions on the register, it's not particularly common.

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. On the other hand, it's always possible that professional investors are avoiding a company because they don't think it's the best place for their money. Dongwha EnterpriseLtd's earnings and revenue track record (below) may not be compelling to institutional investors -- or they simply might not have looked at the business closely.

Dongwha EnterpriseLtd is not owned by hedge funds. Dongwha International Co. Ltd is currently the company's 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. Eun-Ho Seung is the second largest shareholder owning 6.4% of common stock, and Myung-Ho Seung holds about 5.2% of the company stock. Myung-Ho Seung, who is the third-largest shareholder, also happens to hold the title of Chairman of the Board.

Researching institutional ownership is a good way to gauge and filter a stock's expected performance. The same can be achieved by studying analyst sentiments. There is some analyst coverage of the stock, but it could still become more well known, with time.

Insider Ownership Of Dongwha EnterpriseLtd

The definition of an insider can differ slightly between different countries, but members of the board of directors always count. 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 Dongwha Enterprise Co.,Ltd. Insiders have a ₩69b stake in this ₩410b business. We 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-- including retail investors -- own 25% stake in the company, and hence can't 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.

Private Company Ownership

It seems that Private Companies own 58%, of the Dongwha EnterpriseLtd stock. 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:

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 instance, we've identified 1 warning sign for Dongwha EnterpriseLtd 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.