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What You Need To Know About Digital China Holdings Limited's (HKG:861) Investor Composition

Simply Wall St ·  05/24 06:55

If you want to know who really controls $DC HOLDINGS(00861.HK)$, then you'll have to look at the makeup of its share registry.  Institutions often own shares in more established companies, while it's not unusual to see insiders own a fair bit of smaller companies.   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.

With a market capitalization of HK$6.3b, Digital China Holdings is a decent size, so it is probably on the radar of 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 Digital China Holdings.

View our latest analysis for Digital China Holdings

SEHK:861 Ownership Breakdown May 23rd 2022

What Does The Institutional Ownership Tell Us About Digital China 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.

We can see that Digital China Holdings does have institutional investors; and they hold a good portion of the company's stock.  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.  If multiple institutions change their view on a stock at the same time, you could see the share price drop fast. It's therefore worth looking at Digital China Holdings' earnings history below. Of course, the future is what really matters.

SEHK:861 Earnings and Revenue Growth May 23rd 2022

Hedge funds don't have many shares in Digital China Holdings.      The company's largest shareholder is Guangzhou City Construction Jiazi Investment Partnership Enterprise (Limited Partnership), with ownership of 18%.       For context, the second largest shareholder holds about 14% of the shares outstanding, followed by an ownership of 11% by the third-largest shareholder.     Wei Guo, who is the second-largest shareholder, also happens to hold the title of Chief Executive Officer.

Our research also brought to light the fact that roughly 52% of the company is controlled by the top 4 shareholders suggesting that these owners wield significant influence on the business.

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 Digital China 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.

It seems insiders own a significant proportion of Digital China Holdings Limited.   It has a market capitalization of just HK$6.3b, and insiders have HK$1.4b worth of shares in their own names.  This may suggest that the founders still own a lot of shares. You can  click here to see if they have been buying or selling.

General Public Ownership

The general public-- including retail investors -- own 23% stake in the company, and hence can't easily be ignored.   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

It seems that Private Companies own 31%, of the Digital China Holdings stock.   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.

Public Company Ownership

It appears to us that public companies own 11% of Digital China Holdings.   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.    Take risks for example - Digital China Holdings has   2 warning signs  we think you should be aware of.

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
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.

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