Sino Biopharmaceutical Limited's (HKG:1177) largest shareholder, CEO S. Y. Tse sees holdings value fall by 7.4% following recent drop

Key Insights

• Sino Biopharmaceutical's significant insider ownership suggests inherent interests in company's expansion
• A total of 4 investors have a majority stake in the company with 51% ownership
• Institutional ownership in Sino Biopharmaceutical is 17%

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To get a sense of who is truly in control of Sino Biopharmaceutical Limited (HKG:1177), it is important to understand the ownership structure of the business. We can see that individual insiders own the lion's share in the company with 51% ownership. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

And last week, insiders endured the biggest losses as the stock fell by 7.4%.

In the chart below, we zoom in on the different ownership groups of Sino Biopharmaceutical.

See our latest analysis for Sino Biopharmaceutical

What Does The Institutional Ownership Tell Us About Sino Biopharmaceutical?

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.

Sino Biopharmaceutical already has institutions on the share registry. Indeed, they own a respectable stake in the company. 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 Sino Biopharmaceutical's historic earnings and revenue below, but keep in mind there's always more to the story.

Hedge funds don't have many shares in Sino Biopharmaceutical. The company's CEO S. Y. Tse is the largest shareholder with 23% of shares outstanding. With 17% and 9.4% of the shares outstanding respectively, Cheung Ling Cheng and Ping Tse are the second and third largest shareholders. Interestingly, the second and third-largest shareholders also happen to be the Senior Key Executive and Vice Chairman, respectively. This once again signifies considerable insider ownership amongst the company's top shareholders.

After doing some more digging, we found that the top 4 shareholders control more than half of the company's shares which essentially means that there is concentrated ownership amongst the top shareholders, most of whom happen to be insiders!

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 Sino Biopharmaceutical

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 the majority of Sino Biopharmaceutical Limited. This means they can collectively make decisions for the company. That means insiders have a very meaningful HK$62b stake in this HK$122b business. Most would be pleased to see the board is investing alongside them. You may wish to discover if they have been buying or selling.

General Public Ownership

The general public, who are usually individual investors, hold a 33% stake in Sino Biopharmaceutical. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.

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.

Many find it useful to take an in depth look at how a company has performed in the past. You can access this detailed graph of past earnings, revenue and cash flow.

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.