Could The Shanghai Fudan-Zhangjiang Bio-Pharmaceutical Co., Ltd. (HKG:1349) Ownership Structure Tell Us Something Useful?

A look at the shareholders of Shanghai Fudan-Zhangjiang Bio-Pharmaceutical Co., Ltd. (HKG:1349) can tell us which group is most powerful. Large companies usually have institutions as shareholders, and we usually see insiders owning shares in smaller companies. I generally like to see some degree of insider ownership, even if only a little. As Nassim Nicholas Taleb said, 'Don’t tell me what you think, tell me what you have in your portfolio.

Shanghai Fudan-Zhangjiang Bio-Pharmaceutical has a market capitalization of HK$14b, so we would expect some institutional investors to have noticed the stock. In the chart below, we can see that institutions are not really that prevalent on the share registry. Let's take a closer look to see what the different types of shareholders can tell us about Shanghai Fudan-Zhangjiang Bio-Pharmaceutical.

Check out our latest analysis for Shanghai Fudan-Zhangjiang Bio-Pharmaceutical

What Does The Institutional Ownership Tell Us About Shanghai Fudan-Zhangjiang Bio-Pharmaceutical?

Many institutions measure their performance against an index that approximates the local market. So they usually pay more attention to companies that are included in major indices.

Since institutions own only a small portion of Shanghai Fudan-Zhangjiang Bio-Pharmaceutical, many may not have spent much time considering the stock. But it's clear that some have; and they liked it enough to buy in. So if the company itself can improve over time, we may well see more institutional buyers in the future. When multiple institutional investors want to buy shares, we often see a rising share price. The past revenue trajectory (shown below) can be an indication of future growth, but there are no guarantees.

Hedge funds don't have many shares in Shanghai Fudan-Zhangjiang Bio-Pharmaceutical. Our data shows that Shanghai Pharmaceuticals Holding Co., Ltd is the largest shareholder with 20% of shares outstanding. For context, the second largest shareholder holds about 15% of the shares outstanding, followed by an ownership of 7.7% by the third-largest shareholder. Additionally, the company's CEO Hai Bo Wang directly holds 5.6% of the total shares outstanding.

To make our study more interesting, we found that the top 5 shareholders control more than half of the company which implies that this group has considerable sway over the company's decision-making.

While studying institutional ownership for a company can add value to your research, it is also a good practice to research analyst recommendations to get a deeper understand of a stock's expected performance. As far I can tell there isn't analyst coverage of the company, so it is probably flying under the radar.

Insider Ownership Of Shanghai Fudan-Zhangjiang Bio-Pharmaceutical

The definition of an insider can differ slightly between different countries, but members of the board of directors always count. 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 Shanghai Fudan-Zhangjiang Bio-Pharmaceutical Co., Ltd.. It has a market capitalization of just HK$14b, and insiders have HK$2.5b worth of shares in their own names. That's quite significant. 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 holds a 34% stake in Shanghai Fudan-Zhangjiang Bio-Pharmaceutical. 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 Equity Ownership

With an ownership of 15%, private equity firms are in a position to play a role in shaping corporate strategy with a focus on value creation. 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

Our data indicates that Private Companies hold 8.2%, of the company's shares. 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.

Public Company Ownership

It appears to us that public companies own 20% of Shanghai Fudan-Zhangjiang Bio-Pharmaceutical. We can't be certain but it is quite possible this is a strategic stake. The businesses may be similar, or work together.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand Shanghai Fudan-Zhangjiang Bio-Pharmaceutical better, we need to consider many other factors. Consider risks, for instance. Every company has them, and we've spotted 1 warning sign for Shanghai Fudan-Zhangjiang Bio-Pharmaceutical you should know about.

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.

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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