Shanghai Fudan-Zhangjiang Bio-Pharmaceutical Co.,Ltd.'s (HKG:1349) market cap surged HK$207m last week, individual investors who have a lot riding on the company were rewarded

Key Insights

• The considerable ownership by individual investors in Shanghai Fudan-Zhangjiang Bio-PharmaceuticalLtd indicates that they collectively have a greater say in management and business strategy
• The top 4 shareholders own 56% of the company
• 18% of Shanghai Fudan-Zhangjiang Bio-PharmaceuticalLtd is held by insiders

If you want to know who really controls Shanghai Fudan-Zhangjiang Bio-Pharmaceutical Co.,Ltd. (HKG:1349), then you'll have to look at the makeup of its share registry. The group holding the most number of shares in the company, around 36% to be precise, is individual investors. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

As a result, individual investors were the biggest beneficiaries of last week’s 11% gain.

In the chart below, we zoom in on the different ownership groups of Shanghai Fudan-Zhangjiang Bio-PharmaceuticalLtd.

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

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

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.

Institutions have a very small stake in Shanghai Fudan-Zhangjiang Bio-PharmaceuticalLtd. That indicates that the company is on the radar of some funds, but it isn't particularly popular with professional investors at the moment. If the business gets stronger from here, we could see a situation where more institutions are keen to buy. It is not uncommon to see a big share price rise if multiple institutional investors are trying to buy into a stock at the same time. So check out the historic earnings trajectory, below, but keep in mind it's the future that counts most.

We note that hedge funds don't have a meaningful investment in Shanghai Fudan-Zhangjiang Bio-PharmaceuticalLtd. Shanghai Pharmaceuticals Holding Co., Ltd is currently the company's largest shareholder with 27% of shares outstanding. With 15% and 7.7% of the shares outstanding respectively, China New Enterprise Investment Co., Ltd. and Zong Meng Yang are the second and third largest shareholders. Furthermore, CEO Da Jun Zhao is the owner of 1.5% of the company's shares.

Our research also brought to light the fact that roughly 56% of the company is controlled by the top 4 shareholders suggesting that these owners wield significant influence on the business.

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. As far as we 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-PharmaceuticalLtd

The definition of an insider can differ slightly between different countries, but members of the board of directors always count. 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.

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.

It seems insiders own a significant proportion of Shanghai Fudan-Zhangjiang Bio-Pharmaceutical Co.,Ltd.. It has a market capitalization of just HK$6.1b, and insiders have HK$1.1b worth of shares in their own names. This may suggest that the founders still own a lot of shares. You can click here to see if they have been buying or selling.

General Public Ownership

With a 36% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Shanghai Fudan-Zhangjiang Bio-PharmaceuticalLtd. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.

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 might like this, because private equity are sometimes activists who hold management accountable. But other times, private equity is selling out, having taking the company public.

Public Company Ownership

Public companies currently own 27% of Shanghai Fudan-Zhangjiang Bio-PharmaceuticalLtd stock. 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:

While it is well worth considering the different groups that own a company, there are other factors that are even more important. Be aware that Shanghai Fudan-Zhangjiang Bio-PharmaceuticalLtd is showing 2 warning signs in our investment analysis , and 1 of those is a bit unpleasant...

If you would prefer check out another company -- one with potentially superior financials -- then do not miss this free list of interesting companies, backed by strong financial data.

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.