Sirio Pharma Co., Ltd.'s (SZSE:300791) 11% gain last week benefited both private companies who own 43% as well as insiders

Key Insights

• The considerable ownership by private companies in Sirio Pharma indicates that they collectively have a greater say in management and business strategy
• The top 2 shareholders own 52% of the company
• Insider ownership in Sirio Pharma is 23%

If you want to know who really controls Sirio Pharma Co., Ltd. (SZSE:300791), then you'll have to look at the makeup of its share registry. And the group that holds the biggest piece of the pie are private companies with 43% ownership. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

Following a 11% increase in the stock price last week, private companies profited the most, but insiders who own 23% stock also stood to gain from the increase.

Let's delve deeper into each type of owner of Sirio Pharma, beginning with the chart below.

View our latest analysis for Sirio Pharma

What Does The Institutional Ownership Tell Us About Sirio Pharma?

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.

We can see that Sirio Pharma does have institutional investors; and they hold a good portion of the company's stock. 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 Sirio Pharma's historic earnings and revenue below, but keep in mind there's always more to the story.

Sirio Pharma is not owned by hedge funds. The company's largest shareholder is Guangdong Guanghui Investment Co., Ltd., with ownership of 43%. Meanwhile, the second and third largest shareholders, hold 9.2% and 7.5%, of the shares outstanding, respectively. Note that the second and third-largest shareholders are also Chief Executive Officer and Member of the Board of Directors, respectively, meaning that the company's top shareholders are insiders.

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 52% stake.

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. There are plenty of analysts covering the stock, so it might be worth seeing what they are forecasting, too.

Insider Ownership Of Sirio Pharma

The definition of an insider can differ slightly between different countries, but members of the board of directors always count. Company management run the business, but the CEO will answer to the board, even if he or she is a member of it.

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 Sirio Pharma Co., Ltd.. It has a market capitalization of just CN¥6.8b, and insiders have CN¥1.5b worth of shares in their own names. 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 16% stake in Sirio Pharma. 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

We can see that Private Companies own 43%, of the shares on issue. 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 Sirio Pharma better, we need to consider many other factors. Consider risks, for instance. Every company has them, and we've spotted 1 warning sign for Sirio Pharma you should know about.

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.