Fujian Aonong Biological Technology Group Incorporation Limited's (SHSE:603363) stock price dropped 12% last week; individual investors would not be happy

Key Insights

• The considerable ownership by individual investors in Fujian Aonong Biological Technology Group Incorporation indicates that they collectively have a greater say in management and business strategy
• 50% of the business is held by the top 5 shareholders
• 13% of Fujian Aonong Biological Technology Group Incorporation is held by insiders

To get a sense of who is truly in control of Fujian Aonong Biological Technology Group Incorporation Limited (SHSE:603363), it is important to understand the ownership structure of the business. With 46% stake, individual investors possess the maximum shares in the company. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

As a result, individual investors as a group endured the highest losses last week after market cap fell by CN¥383m.

In the chart below, we zoom in on the different ownership groups of Fujian Aonong Biological Technology Group Incorporation.

Check out our latest analysis for Fujian Aonong Biological Technology Group Incorporation

What Does The Institutional Ownership Tell Us About Fujian Aonong Biological Technology Group Incorporation?

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.

Institutions have a very small stake in Fujian Aonong Biological Technology Group Incorporation. That indicates that the company is on the radar of some funds, but it isn't particularly popular with professional investors at the moment. So if the company itself can improve over time, we may well see more institutional buyers in the future. It is not uncommon to see a big share price rise if multiple institutional investors are trying to buy into a stock at the same time. So check out the historic earnings trajectory, below, but keep in mind it's the future that counts most.

Fujian Aonong Biological Technology Group Incorporation is not owned by hedge funds. Zhangzhou Aonong Investment Co., Ltd. is currently the company's largest shareholder with 31% of shares outstanding. For context, the second largest shareholder holds about 10% of the shares outstanding, followed by an ownership of 5.1% by the third-largest shareholder. You Lin Wu, 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 50% of the company is controlled by the top 5 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. While there is some analyst coverage, the company is probably not widely covered. So it could gain more attention, down the track.

Insider Ownership Of Fujian Aonong Biological Technology Group Incorporation

While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. 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.

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 a reasonable proportion of Fujian Aonong Biological Technology Group Incorporation Limited. Insiders have a CN¥346m stake in this CN¥2.7b business. We would say this shows alignment with shareholders, but it is worth noting that the company is still quite small; some insiders may have founded the business. You can click here to see if those insiders 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. This size of ownership, while considerable, may not be enough to change company policy if the decision is not in sync with other large shareholders.

Private Company Ownership

Our data indicates that Private Companies hold 40%, 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:

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 - Fujian Aonong Biological Technology Group Incorporation has 1 warning sign we think you should be aware of.

If you are like me, you may want to think about whether this company will grow or shrink. Luckily, you can check this free report showing analyst forecasts for its future.

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.