State or government invested in Shenzhen Weiguang Biological Products Co., Ltd. (SZSE:002880) copped the brunt of last week's CN¥460m market cap decline

Key Insights

• Significant control over Shenzhen Weiguang Biological Products by state or government implies that the general public has more power to influence management and governance-related decisions
• 65% of the company is held by a single shareholder (Shenzhen Municipal People's Government State-owned Assets Supervision and Administration Commission)
• Using data from company's past performance alongside ownership research, one can better assess the future performance of a company

To get a sense of who is truly in control of Shenzhen Weiguang Biological Products Co., Ltd. (SZSE:002880), it is important to understand the ownership structure of the business. With 65% stake, state or government possess the maximum shares in the company. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

As a result, state or government as a group endured the highest losses last week after market cap fell by CN¥460m.

Let's delve deeper into each type of owner of Shenzhen Weiguang Biological Products, beginning with the chart below.

View our latest analysis for Shenzhen Weiguang Biological Products

What Does The Institutional Ownership Tell Us About Shenzhen Weiguang Biological Products?

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.

Shenzhen Weiguang Biological Products already has institutions on the share registry. Indeed, they own a respectable stake in the company. This suggests some credibility amongst professional investors. But we can't rely on that fact alone since institutions make bad investments sometimes, just like everyone does. 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 Shenzhen Weiguang Biological Products, (below). Of course, keep in mind that there are other factors to consider, too.

Shenzhen Weiguang Biological Products is not owned by hedge funds. Our data shows that Shenzhen Municipal People's Government State-owned Assets Supervision and Administration Commission is the largest shareholder with 65% of shares outstanding. With such a huge stake in the ownership, we infer that they have significant control of the future of the company. China National Pharmaceutical Group Corporation is the second largest shareholder owning 7.2% of common stock, and Guangzhou Jiahe Biotechnology Co. Ltd. holds about 2.5% of the company stock.

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 is a little analyst coverage of the stock, but not much. So there is room for it to gain more coverage.

Insider Ownership Of Shenzhen Weiguang Biological Products

The definition of an insider can differ slightly between different countries, but members of the board of directors always count. Management ultimately answers to the board. However, it is not uncommon for managers to be executive board members, especially if they are a founder or the CEO.

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.

We note our data does not show any board members holding shares, personally. Given we are not picking up on insider ownership, we may have missing data. Therefore, it would be interesting to assess the CEO compensation and tenure, here.

General Public Ownership

The general public, who are usually individual investors, hold a 20% stake in Shenzhen Weiguang Biological Products. 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

We can see that Private Companies own 9.7%, 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:

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 1 warning sign for Shenzhen Weiguang Biological Products that you should be aware of.

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.