Private companies who have a significant stake must be disappointed along with institutions after Sinopharm Group Co. Ltd.'s (HKG:1099) market cap dropped by HK$2.8b

Key Insights

• The considerable ownership by private companies in Sinopharm Group indicates that they collectively have a greater say in management and business strategy
• The largest shareholder of the company is China National Pharmaceutical Group Corporation with a 57% stake
• Institutions own 26% of Sinopharm Group

Every investor in Sinopharm Group Co. Ltd. (HKG:1099) should be aware of the most powerful shareholder groups. And the group that holds the biggest piece of the pie are private companies with 57% ownership. Put another way, the group faces the maximum upside potential (or downside risk).

While institutions, who own 26% shares weren’t spared from last week’s HK$2.8b market cap drop, private companies as a group suffered the maximum losses

Let's delve deeper into each type of owner of Sinopharm Group, beginning with the chart below.

See our latest analysis for Sinopharm Group

What Does The Institutional Ownership Tell Us About Sinopharm Group?

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.

Sinopharm Group already has institutions on the share registry. Indeed, they own a respectable stake in the company. This can indicate that the company has a certain degree of credibility in the investment community. However, it is best to be wary of relying on the supposed validation that comes with institutional investors. They too, get it wrong sometimes. If multiple institutions change their view on a stock at the same time, you could see the share price drop fast. It's therefore worth looking at Sinopharm Group's earnings history below. Of course, the future is what really matters.

Sinopharm Group is not owned by hedge funds. China National Pharmaceutical Group Corporation is currently the company's largest shareholder with 57% of shares outstanding. This implies that they have majority interest control of the future of the company. With 5.2% and 3.2% of the shares outstanding respectively, FMR LLC and Lazard Asset Management LLC are the second and third largest shareholders.

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 Sinopharm Group

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. Company management run the business, but the CEO will answer to the board, even if he or she is a member of it.

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.

Our most recent data indicates that insiders own less than 1% of Sinopharm Group Co. Ltd.. We do note, however, it is possible insiders have an indirect interest through a private company or other corporate structure. Keep in mind that it's a big company, and the insiders own HK$3.1m worth of shares. The absolute value might be more important than the proportional share. Arguably, recent buying and selling is just as important to consider. You can click here to see if insiders have been buying or selling.

General Public Ownership

With a 17% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Sinopharm Group. 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

It seems that Private Companies own 57%, of the Sinopharm Group 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:

I find it very interesting to look at who exactly owns a company. But to truly gain insight, we need to consider other information, too.

I always like to check for a history of revenue growth. You can too, by accessing this free chart of historic revenue and earnings in this detailed graph.

If you would prefer discover what analysts are predicting in terms of future growth, do not miss this free report on analyst forecasts.

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