Disappointing week for ImmuneOnco Biopharmaceuticals (Shanghai) Inc. (HKG:1541) institutional investors who control 26% of the company

Key Insights

• Institutions' substantial holdings in ImmuneOnco Biopharmaceuticals (Shanghai) implies that they have significant influence over the company's share price
• A total of 5 investors have a majority stake in the company with 52% ownership
• Insiders own 19% of ImmuneOnco Biopharmaceuticals (Shanghai)

Every investor in ImmuneOnco Biopharmaceuticals (Shanghai) Inc. (HKG:1541) should be aware of the most powerful shareholder groups. And the group that holds the biggest piece of the pie are institutions with 26% ownership. Put another way, the group faces the maximum upside potential (or downside risk).

Unfortunately, institutional ended up on the other end of the spectrum as market cap fell by HK$2.4b.

Let's take a closer look to see what the different types of shareholders can tell us about ImmuneOnco Biopharmaceuticals (Shanghai).

See our latest analysis for ImmuneOnco Biopharmaceuticals (Shanghai)

What Does The Institutional Ownership Tell Us About ImmuneOnco Biopharmaceuticals (Shanghai)?

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.

ImmuneOnco Biopharmaceuticals (Shanghai) 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 ImmuneOnco Biopharmaceuticals (Shanghai)'s historic earnings and revenue below, but keep in mind there's always more to the story.

We note that hedge funds don't have a meaningful investment in ImmuneOnco Biopharmaceuticals (Shanghai). The company's CEO Tian Wenzhi is the largest shareholder with 19% of shares outstanding. In comparison, the second and third largest shareholders hold about 13% and 11% of the stock.

On looking further, we found that 52% of the shares are owned by the top 5 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. There is some analyst coverage of the stock, but it could still become more well known, with time.

Insider Ownership Of ImmuneOnco Biopharmaceuticals (Shanghai)

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.

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 most recent data indicates that insiders own a reasonable proportion of ImmuneOnco Biopharmaceuticals (Shanghai) Inc.. Insiders have a HK$1.3b stake in this HK$7.0b business. We would say this shows alignment with shareholders, but it is worth noting that the company is still quite small; some insiders may have founded the business. You can click here to see if those insiders have been buying or selling.

General Public Ownership

The general public-- including retail investors -- own 25% stake in the company, and hence can't easily be ignored. 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 16%, 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.

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. Case in point: We've spotted 3 warning signs for ImmuneOnco Biopharmaceuticals (Shanghai) you should be aware of, and 2 of them are significant.

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.