Insiders were the key beneficiaries as Shanghai Serum Bio-Technology Co., Ltd.'s (SHSE:688163) market cap rises to CN¥2.3b

Key Insights

• Shanghai Serum Bio-Technology's significant insider ownership suggests inherent interests in company's expansion
• A total of 2 investors have a majority stake in the company with 56% ownership
• Past performance of a company along with ownership data serve to give a strong idea about prospects for a business

Every investor in Shanghai Serum Bio-Technology Co., Ltd. (SHSE:688163) should be aware of the most powerful shareholder groups. And the group that holds the biggest piece of the pie are individual insiders with 35% 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, insiders were the biggest beneficiaries of last week’s 12% gain.

Let's delve deeper into each type of owner of Shanghai Serum Bio-Technology, beginning with the chart below.

View our latest analysis for Shanghai Serum Bio-Technology

What Does The Institutional Ownership Tell Us About Shanghai Serum Bio-Technology?

Institutions typically measure themselves against a benchmark when reporting to their own investors, so they often become more enthusiastic about a stock once it's included in a major index. We would expect most companies to have some institutions on the register, especially if they are growing.

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

We note that hedge funds don't have a meaningful investment in Shanghai Serum Bio-Technology. Zhihe Fan is currently the company's largest shareholder with 34% of shares outstanding. For context, the second largest shareholder holds about 22% of the shares outstanding, followed by an ownership of 2.8% by the third-largest shareholder.

To make our study more interesting, we found that the top 2 shareholders have a majority ownership in the company, meaning that they are powerful enough to influence the decisions of the company.

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. As far as we can tell there isn't analyst coverage of the company, so it is probably flying under the radar.

Insider Ownership Of Shanghai Serum Bio-Technology

While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. Company management run the business, but the CEO will answer to the board, even if he or she is a member of it.

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 information suggests that insiders maintain a significant holding in Shanghai Serum Bio-Technology Co., Ltd.. It has a market capitalization of just CN¥2.3b, and insiders have CN¥786m worth of shares in their own names. It is great to see insiders so invested in the business. It might be worth checking if those insiders have been buying recently.

General Public Ownership

The general public, who are usually individual investors, hold a 31% stake in Shanghai Serum Bio-Technology. 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

It seems that Private Companies own 27%, of the Shanghai Serum Bio-Technology stock. 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:

While it is well worth considering the different groups that own a company, there are other factors that are even more important. For instance, we've identified 3 warning signs for Shanghai Serum Bio-Technology (1 makes us a bit uncomfortable) that you should be aware of.

Of course this may not be the best stock to buy. So take a peek at this free free list of interesting companies.

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.