Retail investors among ChenGuang Biotech Group Co., Ltd.'s (SZSE:300138) largest stockholders and were hit after last week's 7.9% price drop

Key Insights

• The considerable ownership by retail investors in ChenGuang Biotech Group indicates that they collectively have a greater say in management and business strategy
• A total of 25 investors have a majority stake in the company with 47% ownership
• 31% of ChenGuang Biotech Group is held by insiders

Every investor in ChenGuang Biotech Group Co., Ltd. (SZSE:300138) should be aware of the most powerful shareholder groups. With 53% stake, retail 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).

While the holdings of retail investors took a hit after last week’s 7.9% price drop, insiders with their 31% also suffered.

In the chart below, we zoom in on the different ownership groups of ChenGuang Biotech Group.

See our latest analysis for ChenGuang Biotech Group

What Does The Institutional Ownership Tell Us About ChenGuang Biotech Group?

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.

ChenGuang Biotech Group 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 ChenGuang Biotech Group's earnings history below. Of course, the future is what really matters.

ChenGuang Biotech Group is not owned by hedge funds. With a 21% stake, CEO Qingguo Lu is the largest shareholder. In comparison, the second and third largest shareholders hold about 3.4% and 3.1% of the stock.

A deeper look at our ownership data shows that the top 25 shareholders collectively hold less than half of the register, suggesting a large group of small holders where no single shareholder has a majority.

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 ChenGuang Biotech Group

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.

Insider ownership is positive when it signals leadership are thinking like the true owners of the company. However, high insider ownership can also give immense power to a small group within the company. This can be negative in some circumstances.

Our most recent data indicates that insiders own a reasonable proportion of ChenGuang Biotech Group Co., Ltd.. Insiders own CN¥1.3b worth of shares in the CN¥4.3b company. 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 53% of ChenGuang Biotech Group. With this amount of ownership, retail investors can collectively play a role in decisions that affect shareholder returns, such as dividend policies and the appointment of directors. They can also exercise the power to vote on acquisitions or mergers that may not improve profitability.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand ChenGuang Biotech Group better, we need to consider many other factors. For instance, we've identified 4 warning signs for ChenGuang Biotech Group (1 is potentially serious) that you should be aware of.

Ultimately the future is most important. You can access this free report on analyst forecasts for the company.

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.