Guangdong Hybribio Biotech Co.,Ltd.'s (SZSE:300639) last week's 8.0% decline must have disappointed individual investors who have a significant stake

Key Insights

• The considerable ownership by individual investors in Guangdong Hybribio BiotechLtd indicates that they collectively have a greater say in management and business strategy
• The top 14 shareholders own 50% of the company
• Ownership research, combined with past performance data can help provide a good understanding of opportunities in a stock

A look at the shareholders of Guangdong Hybribio Biotech Co.,Ltd. (SZSE:300639) can tell us which group is most powerful. The group holding the most number of shares in the company, around 49% to be precise, is individual investors. Put another way, the group faces the maximum upside potential (or downside risk).

As market cap fell to CN¥4.2b last week, individual investors would have faced the highest losses than any other shareholder groups of the company.

In the chart below, we zoom in on the different ownership groups of Guangdong Hybribio BiotechLtd.

Check out our latest analysis for Guangdong Hybribio BiotechLtd

What Does The Institutional Ownership Tell Us About Guangdong Hybribio BiotechLtd?

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.

We can see that Guangdong Hybribio BiotechLtd does have institutional investors; and they hold a good portion of the company's stock. 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. When multiple institutions own a stock, there's always a risk that they are in a 'crowded trade'. When such a trade goes wrong, multiple parties may compete to sell stock fast. This risk is higher in a company without a history of growth. You can see Guangdong Hybribio BiotechLtd's historic earnings and revenue below, but keep in mind there's always more to the story.

Guangdong Hybribio BiotechLtd is not owned by hedge funds. The company's largest shareholder is Hong Kong S&T Limited, with ownership of 30%. Meanwhile, the second and third largest shareholders, hold 6.3% and 4.8%, of the shares outstanding, respectively.

After doing some more digging, we found that the top 14 have the combined ownership of 50% in the company, suggesting that no single shareholder has significant control over 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. We're not picking up on any analyst coverage of the stock at the moment, so the company is unlikely to be widely held.

Insider Ownership Of Guangdong Hybribio BiotechLtd

The definition of company insiders can be subjective and does vary between jurisdictions. Our data reflects individual insiders, capturing board members at the very least. 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.

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.

We can report that insiders do own shares in Guangdong Hybribio Biotech Co.,Ltd.. It has a market capitalization of just CN¥4.2b, and insiders have CN¥99m worth of shares, in their own names. It is good to see some investment by insiders, but it might be worth checking if those insiders have been buying.

General Public Ownership

The general public, who are usually individual investors, hold a 49% stake in Guangdong Hybribio BiotechLtd. 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 41%, of the shares on issue. Private companies may be related parties. Sometimes insiders have an interest in a public company through a holding in a private company, rather than in their own capacity as an individual. While it's hard to draw any broad stroke conclusions, it is worth noting as an area for further research.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand Guangdong Hybribio BiotechLtd better, we need to consider many other factors. To that end, you should learn about the 2 warning signs we've spotted with Guangdong Hybribio BiotechLtd (including 1 which can't be ignored) .

If you would prefer check out another company -- one with potentially superior financials -- then do not miss this free list of interesting companies, backed by strong financial data.

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.