Cryofocus Medtech (Shanghai) Co., Ltd.'s (HKG:6922) market cap surged HK$110m last week, private companies who have a lot riding on the company were rewarded

Key Insights

• Significant control over Cryofocus Medtech (Shanghai) by private companies implies that the general public has more power to influence management and governance-related decisions
• 52% of the business is held by the top 3 shareholders
• Insider ownership in Cryofocus Medtech (Shanghai) is 16%

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If you want to know who really controls Cryofocus Medtech (Shanghai) Co., Ltd. (HKG:6922), then you'll have to look at the makeup of its share registry. We can see that private companies own the lion's share in the company with 35% ownership. Put another way, the group faces the maximum upside potential (or downside risk).

As a result, private companies were the biggest beneficiaries of last week’s 10.0% gain.

Let's take a closer look to see what the different types of shareholders can tell us about Cryofocus Medtech (Shanghai).

Check out our latest analysis for Cryofocus Medtech (Shanghai)

What Does The Institutional Ownership Tell Us About Cryofocus Medtech (Shanghai)?

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.

Institutions have a very small stake in Cryofocus Medtech (Shanghai). That indicates that the company is on the radar of some funds, but it isn't particularly popular with professional investors at the moment. So if the company itself can improve over time, we may well see more institutional buyers in the future. We sometimes see a rising share price when a few big institutions want to buy a certain stock at the same time. The history of earnings and revenue, which you can see below, could be helpful in considering if more institutional investors will want the stock. Of course, there are plenty of other factors to consider, too.

Cryofocus Medtech (Shanghai) is not owned by hedge funds. Our data shows that Ningbo Linfeng Biotechnology Co., Ltd is the largest shareholder with 33% of shares outstanding. Hangzhou Proxima Innovative Investment Management L.P. is the second largest shareholder owning 9.9% of common stock, and Shiwen Lv holds about 9.2% of the company stock. Shiwen Lv, who is the third-largest shareholder, also happens to hold the title of Member of the Board of Directors. Furthermore, CEO Jun Zhu is the owner of 0.6% of the company's shares.

To make our study more interesting, we found that the top 3 shareholders have a majority ownership in the company, meaning that they are powerful enough to influence the decisions of 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 Cryofocus Medtech (Shanghai)

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

Most consider insider ownership a positive because it can indicate the board is well aligned with other shareholders. However, on some occasions too much power is concentrated within this group.

Our information suggests that insiders maintain a significant holding in Cryofocus Medtech (Shanghai) Co., Ltd.. It has a market capitalization of just HK$1.2b, and insiders have HK$199m worth of shares in their own names. 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, who are usually individual investors, hold a 14% stake in Cryofocus Medtech (Shanghai). While this size of ownership may not be enough to sway a policy decision in their favour, they can still make a collective impact on company policies.

Private Equity Ownership

Private equity firms hold a 23% stake in Cryofocus Medtech (Shanghai). This suggests they can be influential in key policy decisions. Some investors might be encouraged by this, since private equity are sometimes able to encourage strategies that help the market see the value in the company. Alternatively, those holders might be exiting the investment after taking it public.

Private Company Ownership

It seems that Private Companies own 35%, of the Cryofocus Medtech (Shanghai) 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:

It's always worth thinking about the different groups who own shares in a company. But to understand Cryofocus Medtech (Shanghai) better, we need to consider many other factors. Take risks for example - Cryofocus Medtech (Shanghai) has 1 warning sign we think 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.