Individual investors who hold 55% of Hainan Poly Pharm. Co., Ltd (SZSE:300630) gained 29%, insiders profited as well

Key Insights

• The considerable ownership by individual investors in Hainan Poly Pharm indicates that they collectively have a greater say in management and business strategy
• A total of 25 investors have a majority stake in the company with 45% ownership
• 41% of Hainan Poly Pharm is held by insiders

A look at the shareholders of Hainan Poly Pharm. Co., Ltd (SZSE:300630) can tell us which group is most powerful. The group holding the most number of shares in the company, around 55% to be precise, is individual investors. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

While individual investors were the group that benefitted the most from last week’s CN¥1.2b market cap gain, insiders too had a 41% share in those profits.

Let's delve deeper into each type of owner of Hainan Poly Pharm, beginning with the chart below.

Check out our latest analysis for Hainan Poly Pharm

What Does The Institutional Ownership Tell Us About Hainan Poly Pharm?

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.

Less than 5% of Hainan Poly Pharm is held by institutional investors. This suggests that some funds have the company in their sights, but many have not yet bought shares in it. If the company is growing earnings, that may indicate that it is just beginning to catch the attention of these deep-pocketed investors. When multiple institutional investors want to buy shares, we often see a rising share price. The past revenue trajectory (shown below) can be an indication of future growth, but there are no guarantees.

Hainan Poly Pharm is not owned by hedge funds. Looking at our data, we can see that the largest shareholder is the CEO Min Hua Fan with 40% of shares outstanding. With 1.2% and 0.9% of the shares outstanding respectively, National Council for Social Security Fund and Shanghai Shenzhi Asset Management Partnership Enterprise (Limited Partnership) are the second and third largest shareholders.

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.

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 Hainan Poly Pharm

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.

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.

Our most recent data indicates that insiders own a reasonable proportion of Hainan Poly Pharm. Co., Ltd. Insiders own CN¥2.1b worth of shares in the CN¥5.1b company. We would say this shows alignment with shareholders, but it is worth noting that the company is still quite small; some insiders may have founded the business. You can click here to see if those insiders have been buying or selling.

General Public Ownership

The general public, mostly comprising of individual investors, collectively holds 55% of Hainan Poly Pharm shares. This level of ownership gives investors from the wider public some power to sway key policy decisions such as board composition, executive compensation, and the dividend payout ratio.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand Hainan Poly Pharm better, we need to consider many other factors. For instance, we've identified 3 warning signs for Hainan Poly Pharm (2 can't be ignored) that 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.