Individual investors account for 42% of CSPC Pharmaceutical Group Limited's (HKG:1093) ownership, while institutions account for 28%

By
Simply Wall St
Published
December 10, 2021
SEHK:1093
Source: Shutterstock

A look at the shareholders of CSPC Pharmaceutical Group Limited (HKG:1093) can tell us which group is most powerful. With 42% stake, individual investors possess the maximum shares in the company. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

Institutions, on the other hand, account for 28% of the company's stockholders. Institutions often own shares in more established companies, while it's not unusual to see insiders own a fair bit of smaller companies.

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

View our latest analysis for CSPC Pharmaceutical Group

ownership-breakdown
SEHK:1093 Ownership Breakdown December 10th 2021

What Does The Institutional Ownership Tell Us About CSPC Pharmaceutical Group?

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.

CSPC Pharmaceutical Group 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. 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 CSPC Pharmaceutical Group's earnings history below. Of course, the future is what really matters.

earnings-and-revenue-growth
SEHK:1093 Earnings and Revenue Growth December 10th 2021

Hedge funds don't have many shares in CSPC Pharmaceutical Group. The company's CEO Dongchen Cai is the largest shareholder with 23% of shares outstanding. With 6.5% and 6.1% of the shares outstanding respectively, UBS Asset Management and Common Success International Limited are the second and third largest shareholders.

Looking at the shareholder registry, we can see that 50% of the ownership is controlled by the top 12 shareholders, meaning that no single shareholder has a majority interest in the ownership.

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 CSPC Pharmaceutical 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.

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.

It seems insiders own a significant proportion of CSPC Pharmaceutical Group Limited. It is very interesting to see that insiders have a meaningful HK$24b stake in this HK$103b business. It is good to see this level of investment. You can check here to see if those insiders have been buying recently.

General Public Ownership

The general public, who are usually individual investors, hold a 42% stake in CSPC Pharmaceutical Group. This size of ownership, while considerable, may not be enough to change company policy if the decision is not in sync with other large shareholders.

Private Company Ownership

Our data indicates that Private Companies hold 6.3%, of the company's shares. 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 like to dive deeper into how a company has performed in the past. You can find historic revenue and earnings in this detailed graph.

But ultimately it is the future, not the past, that will determine how well the owners of this business will do. Therefore we think it advisable to take a look at this free report showing whether analysts are predicting a brighter 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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