While institutions invested in 3SBio Inc. (HKG:1530) benefited from last week's 6.5% gain, individual investors stood to gain the most

Key Insights

• 3SBio's significant individual investors ownership suggests that the key decisions are influenced by shareholders from the larger public
• A total of 19 investors have a majority stake in the company with 50% ownership
• Institutional ownership in 3SBio is 29%

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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 44% 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.

While individual investors were the group that benefitted the most from last week’s HK$4.6b market cap gain, institutions too had a 29% share in those profits.

Let's delve deeper into each type of owner of 3SBio, beginning with the chart below.

See our latest analysis for 3SBio

What Does The Institutional Ownership Tell Us About 3SBio?

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.

We can see that 3SBio does have institutional investors; and they hold a good portion of the company's stock. 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. 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 3SBio's earnings history below. Of course, the future is what really matters.

3SBio is not owned by hedge funds. Century Sunshine Limited is currently the company's largest shareholder with 20% of shares outstanding. Meanwhile, the second and third largest shareholders, hold 6.1% and 4.9%, of the shares outstanding, respectively. Additionally, the company's CEO Jing Lou directly holds 2.4% of the total shares outstanding.

A closer look at our ownership figures suggests that the top 19 shareholders have a combined ownership of 50% implying that 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. There are a reasonable number of analysts covering the stock, so it might be useful to find out their aggregate view on the future.

Insider Ownership Of 3SBio

The definition of an insider can differ slightly between different countries, but members of the board of directors always count. Management ultimately answers to the board. However, it is not uncommon for managers to be executive board members, especially if they are a founder or the CEO.

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 some shares in 3SBio Inc.. Insiders own HK$4.5b worth of shares (at current prices). 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, who are usually individual investors, hold a 44% stake in 3SBio. While this size of ownership may not be enough to sway a policy decision in their favour, they can still make a collective impact on company policies.

Private Company Ownership

Our data indicates that Private Companies hold 21%, of the company's shares. Private companies may be related parties. Sometimes insiders have an interest in a public company through a holding in a private company, rather than in their own capacity as an individual. While it's hard to draw any broad stroke conclusions, it is worth noting as an area for further research.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand 3SBio better, we need to consider many other factors. For instance, we've identified 2 warning signs for 3SBio (1 is a bit concerning) that you should be aware of.

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.