Key Insights
- Guangzhou Baiyunshan Pharmaceutical Holdings' significant private companies ownership suggests that the key decisions are influenced by shareholders from the larger public
- 52% of the business is held by the top 3 shareholders
- Institutions own 18% of Guangzhou Baiyunshan Pharmaceutical Holdings
Every investor in Guangzhou Baiyunshan Pharmaceutical Holdings Company Limited (HKG:874) should be aware of the most powerful shareholder groups. We can see that private companies own the lion's share in the company with 46% ownership. In other words, the group stands to gain the most (or lose the most) from their investment into the company.
Meanwhile, individual investors make up 36% of the company’s shareholders.
In the chart below, we zoom in on the different ownership groups of Guangzhou Baiyunshan Pharmaceutical Holdings.
View our latest analysis for Guangzhou Baiyunshan Pharmaceutical Holdings
What Does The Institutional Ownership Tell Us About Guangzhou Baiyunshan Pharmaceutical Holdings?
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.
Guangzhou Baiyunshan Pharmaceutical Holdings already has institutions on the share registry. Indeed, they own a respectable stake in the company. 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 Guangzhou Baiyunshan Pharmaceutical Holdings' earnings history below. Of course, the future is what really matters.
We note that hedge funds don't have a meaningful investment in Guangzhou Baiyunshan Pharmaceutical Holdings. Looking at our data, we can see that the largest shareholder is Guangzhou Pharmaceutical Holdings Limited with 45% of shares outstanding. Meanwhile, the second and third largest shareholders, hold 4.2% and 2.9%, of the shares outstanding, respectively.
After doing some more digging, we found that the top 3 shareholders collectively control more than half of the company's shares, implying that they have considerable power to influence the company's decisions.
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. Quite a few analysts cover the stock, so you could look into forecast growth quite easily.
Insider Ownership Of Guangzhou Baiyunshan Pharmaceutical Holdings
While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. Company management run the business, but the CEO will answer to the board, even if he or she is a member of it.
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 data suggests that insiders own under 1% of Guangzhou Baiyunshan Pharmaceutical Holdings Company Limited in their own names. But they may have an indirect interest through a corporate structure that we haven't picked up on. It is a pretty big company, so it would be possible for board members to own a meaningful interest in the company, without owning much of a proportional interest. In this case, they own around HK$67k worth of shares (at current prices). It is always good to see at least some insider ownership, but it might be worth checking if those insiders have been selling.
General Public Ownership
With a 36% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Guangzhou Baiyunshan Pharmaceutical Holdings. 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 46%, of the company's shares. 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.
Next Steps:
It's always worth thinking about the different groups who own shares in a company. But to understand Guangzhou Baiyunshan Pharmaceutical Holdings better, we need to consider many other factors. Take risks for example - Guangzhou Baiyunshan Pharmaceutical Holdings has 2 warning signs (and 1 which is a bit concerning) we think you should know about.
If you would prefer discover what analysts are predicting in terms of future growth, do not miss this free report on analyst forecasts.
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.