Private companies are Yunnan Botanee Bio-Technology Group Co.LTD's (SZSE:300957) biggest owners and were hit after market cap dropped CN¥2.7b

Key Insights

• Significant control over Yunnan Botanee Bio-Technology GroupLTD by private companies implies that the general public has more power to influence management and governance-related decisions
• 61% of the business is held by the top 2 shareholders
• Institutional ownership in Yunnan Botanee Bio-Technology GroupLTD is 10%

To get a sense of who is truly in control of Yunnan Botanee Bio-Technology Group Co.LTD (SZSE:300957), it is important to understand the ownership structure of the business. The group holding the most number of shares in the company, around 55% to be precise, is private companies. Put another way, the group faces the maximum upside potential (or downside risk).

As market cap fell to CN¥26b last week, private companies would have faced the highest losses than any other shareholder groups of the company.

In the chart below, we zoom in on the different ownership groups of Yunnan Botanee Bio-Technology GroupLTD.

Check out our latest analysis for Yunnan Botanee Bio-Technology GroupLTD

What Does The Institutional Ownership Tell Us About Yunnan Botanee Bio-Technology GroupLTD?

Many institutions measure their performance against an index that approximates the local market. So they usually pay more attention to companies that are included in major indices.

As you can see, institutional investors have a fair amount of stake in Yunnan Botanee Bio-Technology GroupLTD. 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 Yunnan Botanee Bio-Technology GroupLTD's earnings history below. Of course, the future is what really matters.

We note that hedge funds don't have a meaningful investment in Yunnan Botanee Bio-Technology GroupLTD. Kunming Nuona Technology Co., Ltd. is currently the company's largest shareholder with 46% of shares outstanding. With 15% and 6.5% of the shares outstanding respectively, Beijing Hongshan Kunde Investment Management Center (L.P.) and Kunming Zhenli Consulting Co., Ltd. are the second and third largest shareholders.

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 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. There are a reasonable number of analysts covering the stock, so it might be useful to find out their aggregate view on the future.

Insider Ownership Of Yunnan Botanee Bio-Technology GroupLTD

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.

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 some shares in Yunnan Botanee Bio-Technology Group Co.LTD. This is a big company, so it is good to see this level of alignment. Insiders own CN¥674m worth of shares (at current prices). Most would say this shows alignment of interests between shareholders and the board. Still, it might be worth checking if those insiders have been selling.

General Public Ownership

With a 18% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Yunnan Botanee Bio-Technology GroupLTD. 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 Equity Ownership

With a stake of 15%, private equity firms could influence the Yunnan Botanee Bio-Technology GroupLTD board. 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.

Private Company Ownership

It seems that Private Companies own 55%, of the Yunnan Botanee Bio-Technology GroupLTD stock. Private companies may be related parties. Sometimes insiders have an interest in a public company through a holding in a private company, rather than in their own capacity as an individual. While it's hard to draw any broad stroke conclusions, it is worth noting as an area for further research.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand Yunnan Botanee Bio-Technology GroupLTD better, we need to consider many other factors. Consider for instance, the ever-present spectre of investment risk. We've identified 2 warning signs with Yunnan Botanee Bio-Technology GroupLTD (at least 1 which is potentially serious) , 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.