Individual investors among China Resources Medical Holdings Company Limited's (HKG:1515) largest stockholders and were hit after last week's 7.3% price drop

Key Insights

• The considerable ownership by individual investors in China Resources Medical Holdings indicates that they collectively have a greater say in management and business strategy
• A total of 4 investors have a majority stake in the company with 51% ownership
• 24% of China Resources Medical Holdings is held by Institutions

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A look at the shareholders of China Resources Medical Holdings Company Limited (HKG:1515) can tell us which group is most powerful. The group holding the most number of shares in the company, around 40% to be precise, is individual investors. Put another way, the group faces the maximum upside potential (or downside risk).

As a result, individual investors as a group endured the highest losses last week after market cap fell by HK$415m.

In the chart below, we zoom in on the different ownership groups of China Resources Medical Holdings.

Check out our latest analysis for China Resources Medical Holdings

What Does The Institutional Ownership Tell Us About China Resources Medical Holdings?

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.

China Resources Medical Holdings 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. 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 China Resources Medical Holdings' historic earnings and revenue below, but keep in mind there's always more to the story.

Hedge funds don't have many shares in China Resources Medical Holdings. China Resources Company Limited is currently the largest shareholder, with 37% of shares outstanding. With 7.3% and 4.9% of the shares outstanding respectively, Fidelity International Ltd and First Sentier Investors (Australia) IM Ltd are the second and third largest shareholders.

Our research also brought to light the fact that roughly 51% of the company is controlled by the top 4 shareholders suggesting that these owners wield significant influence on the business.

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. There are a reasonable number of analysts covering the stock, so it might be useful to find out their aggregate view on the future.

Insider Ownership Of China Resources Medical Holdings

While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. 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.

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 data suggests that insiders own under 1% of China Resources Medical Holdings Company Limited in their own names. But they may have an indirect interest through a corporate structure that we haven't picked up on. It appears that the board holds about HK$1.9m worth of stock. This compares to a market capitalization of HK$5.4b. We generally like to see a board more invested. However it might be worth checking if those insiders have been buying.

General Public Ownership

The general public, who are usually individual investors, hold a 40% stake in China Resources Medical Holdings. 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

We can see that Private Companies own 37%, of the shares on issue. It might be worth looking deeper into this. If related parties, such as insiders, have an interest in one of these private companies, that should be disclosed in the annual report. Private companies may also have a strategic interest in the 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.

I like to dive deeper into how a company has performed in the past. You can find historic revenue and earnings in this detailed graph.

Ultimately the future is most important. You can access this free report on analyst forecasts for the company.

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.