Key Insights
- Hua Medicine (Shanghai)'s significant individual investors ownership suggests that the key decisions are influenced by shareholders from the larger public
- The top 16 shareholders own 42% of the company
- Using data from company's past performance alongside ownership research, one can better assess the future performance of a company
A look at the shareholders of Hua Medicine (Shanghai) Ltd. (HKG:2552) can tell us which group is most powerful. With 58% stake, individual investors possess the maximum shares in the company. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).
As a result, individual investors collectively scored the highest last week as the company hit HK$1.3b market cap following a 12% gain in the stock.
Let's take a closer look to see what the different types of shareholders can tell us about Hua Medicine (Shanghai).
View our latest analysis for Hua Medicine (Shanghai)
What Does The Institutional Ownership Tell Us About Hua Medicine (Shanghai)?
Institutions typically measure themselves against a benchmark when reporting to their own investors, so they often become more enthusiastic about a stock once it's included in a major index. We would expect most companies to have some institutions on the register, especially if they are growing.
As you can see, institutional investors have a fair amount of stake in Hua Medicine (Shanghai). This implies the analysts working for those institutions have looked at the stock and they like it. But just like anyone else, they could be wrong. 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 Hua Medicine (Shanghai)'s earnings history below. Of course, the future is what really matters.
Hua Medicine (Shanghai) is not owned by hedge funds. Arch Venture Partners, L.P. is currently the largest shareholder, with 13% of shares outstanding. With 11% and 7.6% of the shares outstanding respectively, VR Adviser, LLC and WuXi PharmaTech Healthcare Fund I General Partner L.P. are the second and third largest shareholders. Furthermore, CEO Li Chen is the owner of 4.0% of the company's shares.
Our studies suggest that the top 16 shareholders collectively control less than half of the company's shares, meaning that the company's shares are widely disseminated and there is no dominant shareholder.
While studying institutional ownership for a company can add value to your research, it is also a good practice to research analyst recommendations to get a deeper understand of a stock's expected performance. Our information suggests that there isn't any analyst coverage of the stock, so it is probably little known.
Insider Ownership Of Hua Medicine (Shanghai)
The definition of an insider can differ slightly between different countries, but members of the board of directors always count. 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.
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 some shares in Hua Medicine (Shanghai) Ltd.. It has a market capitalization of just HK$1.3b, and insiders have HK$62m worth of shares, in their own names. Some would say this shows alignment of interests between shareholders and the board, though we generally prefer to see bigger insider holdings. But it might be worth checking if those insiders have been selling.
General Public Ownership
The general public, who are usually individual investors, hold a substantial 58% stake in Hua Medicine (Shanghai), suggesting it is a fairly popular stock. This level of ownership gives investors from the wider public some power to sway key policy decisions such as board composition, executive compensation, and the dividend payout ratio.
Private Equity Ownership
Private equity firms hold a 31% stake in Hua Medicine (Shanghai). This suggests they can be influential in key policy decisions. Sometimes we see private equity stick around for the long term, but generally speaking they have a shorter investment horizon and -- as the name suggests -- don't invest in public companies much. After some time they may look to sell and redeploy capital elsewhere.
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.
I like to dive deeper into how a company has performed in the past. You can access this interactive graph of past earnings, revenue and cash flow, for free.
Of course this may not be the best stock to buy. So take a peek at this free free list of interesting companies.
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.