Inner Mongolia Furui Medical Science Co., Ltd.'s (SZSE:300049) market cap dropped CN¥1.3b last week; individual investors who hold 52% were hit as were institutions

Key Insights

• The considerable ownership by individual investors in Inner Mongolia Furui Medical Science indicates that they collectively have a greater say in management and business strategy
• The top 25 shareholders own 46% of the company
• 18% of Inner Mongolia Furui Medical Science is held by insiders

Every investor in Inner Mongolia Furui Medical Science Co., Ltd. (SZSE:300049) should be aware of the most powerful shareholder groups. With 52% stake, individual investors possess the maximum shares in the company. Put another way, the group faces the maximum upside potential (or downside risk).

While the holdings of individual investors took a hit after last week’s 8.8% price drop, institutions with their 21% holdings also suffered.

Let's take a closer look to see what the different types of shareholders can tell us about Inner Mongolia Furui Medical Science.

View our latest analysis for Inner Mongolia Furui Medical Science

What Does The Institutional Ownership Tell Us About Inner Mongolia Furui Medical Science?

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.

Inner Mongolia Furui Medical Science 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 Inner Mongolia Furui Medical Science, (below). Of course, keep in mind that there are other factors to consider, too.

Inner Mongolia Furui Medical Science is not owned by hedge funds. With a 11% stake, CEO Guanyi Wang is the largest shareholder. Hohhot Fuchuang Investment Co., Ltd. is the second largest shareholder owning 6.0% of common stock, and China SDIC Gaoxin Industrial Investment Corp. Ltd. holds about 3.0% of the company stock.

On studying our ownership data, we found that 25 of the top shareholders collectively own less than 50% of the share register, implying that no single individual has a majority interest.

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. Quite a few analysts cover the stock, so you could look into forecast growth quite easily.

Insider Ownership Of Inner Mongolia Furui Medical Science

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.

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.

It seems insiders own a significant proportion of Inner Mongolia Furui Medical Science Co., Ltd.. It has a market capitalization of just CN¥13b, and insiders have CN¥2.4b worth of shares in their own names. That's quite significant. Most would say this shows a good degree of alignment with shareholders, especially in a company of this size. You can click here to see if those insiders have been buying or selling.

General Public Ownership

The general public, who are usually individual investors, hold a substantial 52% stake in Inner Mongolia Furui Medical Science, suggesting it is a fairly popular stock. With this amount of ownership, retail investors can collectively play a role in decisions that affect shareholder returns, such as dividend policies and the appointment of directors. They can also exercise the power to vote on acquisitions or mergers that may not improve profitability.

Private Company Ownership

It seems that Private Companies own 6.0%, of the Inner Mongolia Furui Medical Science stock. It's hard to draw any conclusions from this fact alone, so its worth looking into who owns those private companies. Sometimes insiders or other related parties have an interest in shares in a public company through a separate private 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.

Many find it useful to take an in depth look at how a company has performed in the past. You can access this detailed graph of past earnings, revenue and cash flow.

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com