Private companies in Cabio Biotech (Wuhan) Co., Ltd. (SHSE:688089) are its biggest bettors, and their bets paid off as stock gained 13% last week

Key Insights

• The considerable ownership by private companies in Cabio Biotech (Wuhan) indicates that they collectively have a greater say in management and business strategy
• 50% of the business is held by the top 4 shareholders
• Analyst forecasts along with ownership data serve to give a strong idea about prospects for a business

A look at the shareholders of Cabio Biotech (Wuhan) Co., Ltd. (SHSE:688089) can tell us which group is most powerful. And the group that holds the biggest piece of the pie are private companies with 45% 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, private companies were the biggest beneficiaries of last week’s 13% gain.

Let's delve deeper into each type of owner of Cabio Biotech (Wuhan), beginning with the chart below.

See our latest analysis for Cabio Biotech (Wuhan)

What Does The Institutional Ownership Tell Us About Cabio Biotech (Wuhan)?

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.

Cabio Biotech (Wuhan) already has institutions on the share registry. Indeed, they own a respectable stake in the company. 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 Cabio Biotech (Wuhan)'s historic earnings and revenue below, but keep in mind there's always more to the story.

Cabio Biotech (Wuhan) is not owned by hedge funds. Looking at our data, we can see that the largest shareholder is Wuhan Xiwang Biological Engineering Co., Ltd. with 44% of shares outstanding. For context, the second largest shareholder holds about 3.1% of the shares outstanding, followed by an ownership of 1.4% by the third-largest shareholder. In addition, we found that Dewei Yi, the CEO has 1.4% of the shares allocated to their name.

To make our study more interesting, we found that the top 4 shareholders control more than half of the company which implies that this group has considerable sway over the company's decision-making.

Researching institutional ownership is a good way to gauge and filter a stock's expected performance. The same can be achieved by studying analyst sentiments. 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 Cabio Biotech (Wuhan)

While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. 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.

We can see that insiders own shares in Cabio Biotech (Wuhan) Co., Ltd.. It has a market capitalization of just CN¥3.7b, and insiders have CN¥120m worth of shares, in their own names. Some would say this shows alignment of interests between shareholders and the board. But it might be worth checking if those insiders have been selling.

General Public Ownership

With a 42% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Cabio Biotech (Wuhan). While this size of ownership may not be enough to sway a policy decision in their favour, they can still make a collective impact on company policies.

Private Company Ownership

It seems that Private Companies own 45%, of the Cabio Biotech (Wuhan) 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 Cabio Biotech (Wuhan) better, we need to consider many other factors. For example, we've discovered 2 warning signs for Cabio Biotech (Wuhan) that you should be aware of before investing here.

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.