Key Insights

• The considerable ownership by retail investors in Dongrui Food Group indicates that they collectively have a greater say in management and business strategy
• A total of 10 investors have a majority stake in the company with 51% ownership
• Insiders own 42% of Dongrui Food Group

To get a sense of who is truly in control of Dongrui Food Group Co., Ltd. (SZSE:001201), it is important to understand the ownership structure of the business. And the group that holds the biggest piece of the pie are retail investors with 46% ownership. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

Retail investors gained the most after market cap touched CN¥5.4b last week, while insiders who own 42% also benefitted.

In the chart below, we zoom in on the different ownership groups of Dongrui Food Group.

What Does The Institutional Ownership Tell Us About Dongrui Food Group?

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.

Since institutions own only a small portion of Dongrui Food Group, many may not have spent much time considering the stock. But it's clear that some have; and they liked it enough to buy in. So if the company itself can improve over time, we may well see more institutional buyers in the future. When multiple institutional investors want to buy shares, we often see a rising share price. The past revenue trajectory (shown below) can be an indication of future growth, but there are no guarantees.

We note that hedge funds don't have a meaningful investment in Dongrui Food Group. With a 27% stake, CEO Jiankang Yuan is the largest shareholder. For context, the second largest shareholder holds about 5.7% of the shares outstanding, followed by an ownership of 4.4% by the third-largest shareholder. Interestingly, the third-largest shareholder, Dongqiang Zeng is also a Member of the Board of Directors, again, indicating strong insider ownership amongst the company's top shareholders.

We did some more digging and found that 10 of the top shareholders account for roughly 51% of the register, implying that along with larger shareholders, there are a few smaller shareholders, thereby balancing out each others interests somewhat.

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 Dongrui Food Group

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.

It seems insiders own a significant proportion of Dongrui Food Group Co., Ltd.. Insiders have a CN¥2.3b stake in this CN¥5.4b business. 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 46% 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

Our data indicates that Private Companies hold 8.5%, 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:

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. To that end, you should learn about the 2 warning signs we've spotted with Dongrui Food Group (including 1 which is a bit unpleasant) .

Ultimately the future is most important. You can access this free report on analyst forecasts for the company.

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.