Key Insights
- Significant insider control over Shanghai Haohai Biological Technology implies vested interests in company growth
- 50% of the business is held by the top 2 shareholders
- Institutions own 15% of Shanghai Haohai Biological Technology
If you want to know who really controls Shanghai Haohai Biological Technology Co., Ltd. (HKG:6826), then you'll have to look at the makeup of its share registry. We can see that individual insiders own the lion's share in the company with 62% ownership. In other words, the group stands to gain the most (or lose the most) from their investment into the company.
And last week, insiders endured the biggest losses as the stock fell by 9.2%.
In the chart below, we zoom in on the different ownership groups of Shanghai Haohai Biological Technology.
Check out our latest analysis for Shanghai Haohai Biological Technology
What Does The Institutional Ownership Tell Us About Shanghai Haohai Biological Technology?
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 Shanghai Haohai Biological Technology does have institutional investors; and they hold a good portion of the company's stock. This can indicate that the company has a certain degree of credibility in the investment community. However, it is best to be wary of relying on the supposed validation that comes with institutional investors. They too, get it wrong sometimes. 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 Shanghai Haohai Biological Technology's historic earnings and revenue below, but keep in mind there's always more to the story.
We note that hedge funds don't have a meaningful investment in Shanghai Haohai Biological Technology. Our data shows that Jie You is the largest shareholder with 46% of shares outstanding. For context, the second largest shareholder holds about 3.7% of the shares outstanding, followed by an ownership of 3.6% by the third-largest shareholder. Jianying Wu, who is the third-largest shareholder, also happens to hold the title of Member of the Board of Directors.
To make our study more interesting, we found that the top 2 shareholders have a majority ownership in the company, meaning that they are powerful enough to influence the decisions of the company.
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. We're not picking up on any analyst coverage of the stock at the moment, so the company is unlikely to be widely held.
Insider Ownership Of Shanghai Haohai Biological Technology
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.
I generally consider insider ownership to be a good thing. However, on some occasions it makes it more difficult for other shareholders to hold the board accountable for decisions.
Our most recent data indicates that insiders own the majority of Shanghai Haohai Biological Technology Co., Ltd.. This means they can collectively make decisions for the company. That means insiders have a very meaningful HK$8.9b stake in this HK$14b business. Most would argue this is a positive, showing strong alignment with shareholders. You can click here to see if they have been selling down their stake.
General Public Ownership
The general public, who are usually individual investors, hold a 23% stake in Shanghai Haohai Biological Technology. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.
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. Consider for instance, the ever-present spectre of investment risk. We've identified 1 warning sign with Shanghai Haohai Biological Technology , and understanding them should be part of your investment process.
Of course this may not be the best stock to buy. Therefore, you may wish to see our free collection of interesting prospects boasting favorable financials.
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.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com