Insiders the biggest winners as Shandong Bailong Chuangyuan Bio-Tech Co., Ltd.'s (SHSE:605016) market cap rises to CN¥5.8b

Key Insights

• Insiders appear to have a vested interest in Shandong Bailong Chuangyuan Bio-Tech's growth, as seen by their sizeable ownership
• A total of 2 investors have a majority stake in the company with 58% ownership
• Institutional ownership in Shandong Bailong Chuangyuan Bio-Tech is 11%

To get a sense of who is truly in control of Shandong Bailong Chuangyuan Bio-Tech Co., Ltd. (SHSE:605016), it is important to understand the ownership structure of the business. And the group that holds the biggest piece of the pie are individual insiders with 54% ownership. 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, insiders scored the highest last week as the company hit CN¥5.8b market cap following a 6.8% gain in the stock.

Let's delve deeper into each type of owner of Shandong Bailong Chuangyuan Bio-Tech, beginning with the chart below.

View our latest analysis for Shandong Bailong Chuangyuan Bio-Tech

What Does The Institutional Ownership Tell Us About Shandong Bailong Chuangyuan Bio-Tech?

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.

As you can see, institutional investors have a fair amount of stake in Shandong Bailong Chuangyuan Bio-Tech. 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 Shandong Bailong Chuangyuan Bio-Tech'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 Shandong Bailong Chuangyuan Bio-Tech. Looking at our data, we can see that the largest shareholder is Baode Dou with 47% of shares outstanding. In comparison, the second and third largest shareholders hold about 10% and 3.9% of the stock.

After doing some more digging, we found that the top 2 shareholders collectively control more than half of the company's shares, implying that they have considerable power to influence the company's decisions.

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. Quite a few analysts cover the stock, so you could look into forecast growth quite easily.

Insider Ownership Of Shandong Bailong Chuangyuan Bio-Tech

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.

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 the majority of Shandong Bailong Chuangyuan Bio-Tech Co., Ltd.. This means they can collectively make decisions for the company. That means they own CN¥3.1b worth of shares in the CN¥5.8b company. That's quite meaningful. Most would be pleased to see the board is investing alongside them. You may wish todiscover (for free) if they have been buying or selling.

General Public Ownership

The general public, who are usually individual investors, hold a 25% stake in Shandong Bailong Chuangyuan Bio-Tech. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.

Private Equity Ownership

With an ownership of 10%, private equity firms are in a position to play a role in shaping corporate strategy with a focus on value creation. Some investors might be encouraged by this, since private equity are sometimes able to encourage strategies that help the market see the value in the company. Alternatively, those holders might be exiting the investment after taking it public.

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 2 warning signs with Shandong Bailong Chuangyuan Bio-Tech (at least 1 which doesn't sit too well with us) , and understanding them should be part of your investment process.

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.