Stock Analysis

Private equity firms are Ocumension Therapeutics' (HKG:1477) biggest owners and were hit after market cap dropped HK$414m

Published
SEHK:1477

Key Insights

  • The considerable ownership by private equity firms in Ocumension Therapeutics indicates that they collectively have a greater say in management and business strategy
  • A total of 4 investors have a majority stake in the company with 55% ownership
  • Insiders own 18% of Ocumension Therapeutics

Every investor in Ocumension Therapeutics (HKG:1477) should be aware of the most powerful shareholder groups. The group holding the most number of shares in the company, around 43% to be precise, is private equity firms. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

And last week, private equity firms endured the biggest losses as the stock fell by 9.5%.

Let's take a closer look to see what the different types of shareholders can tell us about Ocumension Therapeutics.

View our latest analysis for Ocumension Therapeutics

SEHK:1477 Ownership Breakdown January 21st 2024

What Does The Institutional Ownership Tell Us About Ocumension Therapeutics?

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.

Ocumension Therapeutics already has institutions on the share registry. Indeed, they own a respectable stake in the company. This can indicate that the company has a certain degree of credibility in the investment community. However, it is best to be wary of relying on the supposed validation that comes with institutional investors. They too, get it wrong sometimes. 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 Ocumension Therapeutics' earnings history below. Of course, the future is what really matters.

SEHK:1477 Earnings and Revenue Growth January 21st 2024

Hedge funds don't have many shares in Ocumension Therapeutics. Looking at our data, we can see that the largest shareholder is 6 Dimensions Capital, L.P. with 24% of shares outstanding. Meanwhile, the second and third largest shareholders, hold 13% and 11%, of the shares outstanding, respectively. Furthermore, CEO Ye Liu is the owner of 4.4% of the company's shares.

On looking further, we found that 55% of the shares are owned by the top 4 shareholders. In other words, these shareholders have a meaningful say in the decisions of the company.

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 Ocumension Therapeutics

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.

Most consider insider ownership a positive because it can indicate the board is well aligned with other shareholders. However, on some occasions too much power is concentrated within this group.

Our information suggests that insiders maintain a significant holding in Ocumension Therapeutics. It has a market capitalization of just HK$3.9b, and insiders have HK$685m worth of shares in their own names. It is great to see insiders so invested in the business. It might be worth checking if those insiders have been buying recently.

General Public Ownership

The general public, who are usually individual investors, hold a 28% stake in Ocumension Therapeutics. 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

Private equity firms hold a 43% stake in Ocumension Therapeutics. This suggests they can be influential in key policy decisions. Sometimes we see private equity stick around for the long term, but generally speaking they have a shorter investment horizon and -- as the name suggests -- don't invest in public companies much. After some time they may look to sell and redeploy capital elsewhere.

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. Take risks for example - Ocumension Therapeutics has 1 warning sign we think you should be aware of.

If you would prefer discover what analysts are predicting in terms of future growth, do not miss this free report on analyst forecasts.

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.