3SBio Inc.'s (HKG:1530) market cap touched HK$20b last week, benefiting both retail investors who own 48% as well as institutions
- 3SBio's significant retail investors ownership suggests that the key decisions are influenced by shareholders from the larger public
- A total of 25 investors have a majority stake in the company with 49% ownership
- 24% of 3SBio is held by Institutions
Every investor in 3SBio Inc. (HKG:1530) should be aware of the most powerful shareholder groups. The group holding the most number of shares in the company, around 48% to be precise, is retail investors. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).
Retail investors gained the most after market cap touched HK$20b last week, while institutions who own 24% also benefitted.
Let's take a closer look to see what the different types of shareholders can tell us about 3SBio.
See our latest analysis for 3SBio
What Does The Institutional Ownership Tell Us About 3SBio?
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.
3SBio 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. 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 3SBio'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 3SBio. Century Sunshine Limited is currently the largest shareholder, with 20% of shares outstanding. Meanwhile, the second and third largest shareholders, hold 6.0% and 2.4%, of the shares outstanding, respectively. In addition, we found that Jing Lou, the CEO has 2.1% of the shares allocated to their name.
A deeper look at our ownership data shows that the top 25 shareholders collectively hold less than half of the register, suggesting a large group of small holders where no single shareholder has a majority.
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. Quite a few analysts cover the stock, so you could look into forecast growth quite easily.
Insider Ownership Of 3SBio
While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. 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.
We can see that insiders own shares in 3SBio Inc.. This is a big company, so it is good to see this level of alignment. Insiders own HK$1.3b worth of shares (at current prices). If you would like to explore the question of insider alignment, you can click here to see if insiders have been buying or selling.
General Public Ownership
With a 48% ownership, the general public, mostly comprising of individual investors, have some degree of sway over 3SBio. 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
We can see that Private Companies own 22%, of the shares on issue. 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.
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.
Ultimately the future is most important. You can access this free report on analyst forecasts for the company.
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.
3SBio Inc., an investment holding company, researches, develops, manufactures, markets, and sells biopharmaceutical products in the People’s Republic of China.
Flawless balance sheet and undervalued.