Individual investors are Wuhan Hiteck Biological Pharma Co.,Ltd's (SZSE:300683) biggest owners and were rewarded after market cap rose by CN¥410m last week

Key Insights

• Significant control over Wuhan Hiteck Biological PharmaLtd by individual investors implies that the general public has more power to influence management and governance-related decisions
• A total of 20 investors have a majority stake in the company with 48% ownership
• 11% of Wuhan Hiteck Biological PharmaLtd is held by insiders

To get a sense of who is truly in control of Wuhan Hiteck Biological Pharma Co.,Ltd (SZSE:300683), it is important to understand the ownership structure of the business. With 52% stake, individual investors 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, individual investors were the biggest beneficiaries of last week’s 12% gain.

Let's take a closer look to see what the different types of shareholders can tell us about Wuhan Hiteck Biological PharmaLtd.

See our latest analysis for Wuhan Hiteck Biological PharmaLtd

What Does The Institutional Ownership Tell Us About Wuhan Hiteck Biological PharmaLtd?

Institutional investors commonly compare their own returns to the returns of a commonly followed index. So they generally do consider buying larger companies that are included in the relevant benchmark index.

Less than 5% of Wuhan Hiteck Biological PharmaLtd 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 business gets stronger from here, we could see a situation where more institutions are keen to buy. 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.

Hedge funds don't have many shares in Wuhan Hiteck Biological PharmaLtd. The company's largest shareholder is Wuhan Sanjiangyuan Investment Development Co., Ltd., with ownership of 19%. Meanwhile, the second and third largest shareholders, hold 11% and 8.4%, of the shares outstanding, respectively. Ya Chen, who is the third-largest shareholder, also happens to hold the title of Chairman of the Board.

A deeper look at our ownership data shows that the top 20 shareholders collectively hold less than half of the register, suggesting a large group of small holders where no single shareholder has a majority.

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. 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 Wuhan Hiteck Biological PharmaLtd

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.

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.

It seems insiders own a significant proportion of Wuhan Hiteck Biological Pharma Co.,Ltd. It has a market capitalization of just CN¥3.9b, and insiders have CN¥438m worth of shares in their own names. This may suggest that the founders still own a lot of shares. You can click here to see if they have been buying or selling.

General Public Ownership

The general public, mostly comprising of individual investors, collectively holds 52% of Wuhan Hiteck Biological PharmaLtd 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.

Private Company Ownership

We can see that Private Companies own 34%, of the shares on issue. 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. For example, we've discovered 1 warning sign for Wuhan Hiteck Biological PharmaLtd that you should be aware of before investing here.

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.