Dongkuk Steel Mill Company Limited's (KRX:460860) market cap surged ₩45b last week, public companies who have a lot riding on the company were rewarded

Key Insights

• Significant control over Dongkuk Steel Mill by public companies implies that the general public has more power to influence management and governance-related decisions
• 51% of the business is held by the top 3 shareholders
• 12% of Dongkuk Steel Mill is held by insiders

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To get a sense of who is truly in control of Dongkuk Steel Mill Company Limited (KRX:460860), it is important to understand the ownership structure of the business. We can see that public companies own the lion's share in the company with 42% ownership. Put another way, the group faces the maximum upside potential (or downside risk).

As a result, public companies were the biggest beneficiaries of last week’s 10% gain.

In the chart below, we zoom in on the different ownership groups of Dongkuk Steel Mill.

Check out our latest analysis for Dongkuk Steel Mill

What Does The Institutional Ownership Tell Us About Dongkuk Steel Mill?

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.

Dongkuk Steel Mill already has institutions on the share registry. Indeed, they own a respectable stake in the company. This suggests some credibility amongst professional investors. But we can't rely on that fact alone since institutions make bad investments sometimes, just like everyone does. When multiple institutions own a stock, there's always a risk that they are in a 'crowded trade'. When such a trade goes wrong, multiple parties may compete to sell stock fast. This risk is higher in a company without a history of growth. You can see Dongkuk Steel Mill's historic earnings and revenue below, but keep in mind there's always more to the story.

Hedge funds don't have many shares in Dongkuk Steel Mill. Our data shows that Dongkuk Holdings Co.,Ltd. is the largest shareholder with 34% of shares outstanding. The second and third largest shareholders are JFE Holdings, Inc. and JFE Steel International Europe B.V, with an equal amount of shares to their name at 8.7%.

To make our study more interesting, we found that the top 3 shareholders have a majority ownership in the company, meaning that they are powerful enough to influence the decisions of the company.

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

Insider Ownership Of Dongkuk Steel Mill

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.

It seems insiders own a significant proportion of Dongkuk Steel Mill Company Limited. Insiders own ₩59b worth of shares in the ₩488b company. 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 Dongkuk Steel Mill. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.

Private Company Ownership

Our data indicates that Private Companies hold 8.7%, 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.

Public Company Ownership

We can see that public companies hold 42% of the Dongkuk Steel Mill shares on issue. This may be a strategic interest and the two companies may have related business interests. It could be that they have de-merged. This holding is probably worth investigating further.

Next Steps:

I find it very interesting to look at who exactly owns a company. But to truly gain insight, we need to consider other information, too. For example, we've discovered 1 warning sign for Dongkuk Steel Mill that you should be aware of before investing here.

If you would prefer check out another company -- one with potentially superior financials -- then do not miss this free list of interesting companies, backed by strong financial data.

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.