Insiders with their considerable ownership were the key benefactors as Wuhan Huakang Century Medical Co., Ltd. (SZSE:301235) touches CN¥2.1b market cap

Key Insights

• Wuhan Huakang Century Medical's significant insider ownership suggests inherent interests in company's expansion
• 53% of the business is held by the top 2 shareholders
• Institutional ownership in Wuhan Huakang Century Medical is 16%

To get a sense of who is truly in control of Wuhan Huakang Century Medical Co., Ltd. (SZSE:301235), it is important to understand the ownership structure of the business. We can see that individual insiders own the lion's share in the company with 47% ownership. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

Clearly, insiders benefitted the most after the company's market cap rose by CN¥390m last week.

In the chart below, we zoom in on the different ownership groups of Wuhan Huakang Century Medical.

View our latest analysis for Wuhan Huakang Century Medical

What Does The Institutional Ownership Tell Us About Wuhan Huakang Century Medical?

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.

Wuhan Huakang Century Medical 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. 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 Wuhan Huakang Century Medical's historic earnings and revenue below, but keep in mind there's always more to the story.

Hedge funds don't have many shares in Wuhan Huakang Century Medical. The company's largest shareholder is Pingtao Tan, with ownership of 47%. Meanwhile, the second and third largest shareholders, hold 6.3% and 4.6%, of the shares outstanding, respectively.

A more detailed study of the shareholder registry showed us that 2 of the top shareholders have a considerable amount of ownership in the company, via their 53% stake.

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 Wuhan Huakang Century Medical

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.

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 information suggests that insiders maintain a significant holding in Wuhan Huakang Century Medical Co., Ltd.. Insiders own CN¥980m worth of shares in the CN¥2.1b company. This may suggest that the founders still own a lot of shares. You can click here to see if they have been buying or selling.

General Public Ownership

The general public, who are usually individual investors, hold a 32% stake in Wuhan Huakang Century Medical. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.

Private Company Ownership

We can see that Private Companies own 4.6%, of the shares on issue. It's hard to draw any conclusions from this fact alone, so its worth looking into who owns those private companies. Sometimes insiders or other related parties have an interest in shares in a public company through a separate private company.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand Wuhan Huakang Century Medical better, we need to consider many other factors. For example, we've discovered 2 warning signs for Wuhan Huakang Century Medical (1 is significant!) that you should be aware of before investing here.

Of course this may not be the best stock to buy. Therefore, you may wish to see our free collection of interesting prospects boasting favorable financials.

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.