Private companies account for 46% of Guangzhou Baiyunshan Pharmaceutical Holdings Company Limited's (HKG:874) ownership, while individual investors account for 34%

Key Insights

• Significant control over Guangzhou Baiyunshan Pharmaceutical Holdings by private companies implies that the general public has more power to influence management and governance-related decisions
• A total of 3 investors have a majority stake in the company with 53% ownership
• Institutional ownership in Guangzhou Baiyunshan Pharmaceutical Holdings is 20%

A look at the shareholders of Guangzhou Baiyunshan Pharmaceutical Holdings Company Limited (HKG:874) can tell us which group is most powerful. And the group that holds the biggest piece of the pie are private companies with 46% ownership. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

Individual investors, on the other hand, account for 34% of the company's stockholders.

Let's take a closer look to see what the different types of shareholders can tell us about Guangzhou Baiyunshan Pharmaceutical Holdings.

See our latest analysis for Guangzhou Baiyunshan Pharmaceutical Holdings

What Does The Institutional Ownership Tell Us About Guangzhou Baiyunshan Pharmaceutical 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.

As you can see, institutional investors have a fair amount of stake in Guangzhou Baiyunshan Pharmaceutical Holdings. 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 Guangzhou Baiyunshan Pharmaceutical Holdings' historic earnings and revenue below, but keep in mind there's always more to the story.

Guangzhou Baiyunshan Pharmaceutical Holdings is not owned by hedge funds. Guangzhou Pharmaceutical Holdings Limited is currently the company's largest shareholder with 45% of shares outstanding. Guangzhou China Life Insurance Urban Development Industry Investment Enterprises (LP) is the second largest shareholder owning 4.5% of common stock, and Norges Bank Investment Management holds about 3.7% of the company stock.

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.

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. There are plenty of analysts covering the stock, so it might be worth seeing what they are forecasting, too.

Insider Ownership Of Guangzhou Baiyunshan Pharmaceutical 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 Guangzhou Baiyunshan Pharmaceutical Holdings Company Limited in their own names. However, it's possible that insiders might have an indirect interest through a more complex structure. It is a pretty big company, so it would be possible for board members to own a meaningful interest in the company, without owning much of a proportional interest. In this case, they own around HK$70k worth of shares (at current prices). It is always good to see at least some insider ownership, but it might be worth checking if those insiders have been selling.

General Public Ownership

The general public, who are usually individual investors, hold a 34% stake in Guangzhou Baiyunshan Pharmaceutical Holdings. 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 Company Ownership

We can see that Private Companies own 46%, 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:

While it is well worth considering the different groups that own a company, there are other factors that are even more important. Take risks for example - Guangzhou Baiyunshan Pharmaceutical Holdings has 1 warning sign we think you should be aware of.

If you are like me, you may want to think about whether this company will grow or shrink. Luckily, you can check this free report showing analyst forecasts for its future.

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