Following recent decline, HOB Biotech Group Corp.,Ltd's (SHSE:688656) top shareholder CEO John Li sees holdings value drop by 12%

Key Insights

• Insiders appear to have a vested interest in HOB Biotech GroupLtd's growth, as seen by their sizeable ownership
• 56% of the company is held by a single shareholder (John Li)
• Ownership research, combined with past performance data can help provide a good understanding of opportunities in a stock

Every investor in HOB Biotech Group Corp.,Ltd (SHSE:688656) should be aware of the most powerful shareholder groups. With 56% stake, individual insiders possess the maximum shares in the company. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

As market cap fell to CN¥8.1b last week, insiders would have faced the highest losses than any other shareholder groups of the company.

Let's delve deeper into each type of owner of HOB Biotech GroupLtd, beginning with the chart below.

See our latest analysis for HOB Biotech GroupLtd

What Does The Institutional Ownership Tell Us About HOB Biotech 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.

HOB Biotech GroupLtd 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. It is not uncommon to see a big share price drop if two large institutional investors try to sell out of a stock at the same time. So it is worth checking the past earnings trajectory of HOB Biotech GroupLtd, (below). Of course, keep in mind that there are other factors to consider, too.

Hedge funds don't have many shares in HOB Biotech GroupLtd. With a 56% stake, CEO John Li is the largest shareholder. This implies that they possess majority interests and have significant control over the company. Investors usually consider it a good sign when the company leadership has such a significant stake, as this is widely perceived to increase the chance that the management will act in the best interests of the company. Suzhou Wairun Investment Management Partnership Enterprise (Limited Partnership) is the second largest shareholder owning 12% of common stock, and Guangzhou Jinyuan Kuntong Equity Investment Management Co., Ltd. holds about 3.3% of the company stock.

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. Our information suggests that there isn't any analyst coverage of the stock, so it is probably little known.

Insider Ownership Of HOB Biotech GroupLtd

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.

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.

It seems that insiders own more than half the HOB Biotech Group Corp.,Ltd stock. This gives them a lot of power. Insiders own CN¥4.6b worth of shares in the CN¥8.1b company. That's extraordinary! Most would argue this is a positive, showing strong alignment with shareholders. You can click here to see if they have been selling down their stake.

General Public Ownership

The general public-- including retail investors -- own 21% stake in the company, and hence can't easily be ignored. 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 14%, 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 HOB Biotech GroupLtd better, we need to consider many other factors. Case in point: We've spotted 2 warning signs for HOB Biotech GroupLtd you should be aware of.

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.