ImmuneOnco Biopharmaceuticals (Shanghai) Inc.'s (HKG:1541) recent 42% pullback adds to one-year year losses, institutional owners may take drastic measures

Key Insights

• Institutions' substantial holdings in ImmuneOnco Biopharmaceuticals (Shanghai) implies that they have significant influence over the company's share price
• 52% of the business is held by the top 5 shareholders
• Insiders own 19% of ImmuneOnco Biopharmaceuticals (Shanghai)

A look at the shareholders of ImmuneOnco Biopharmaceuticals (Shanghai) Inc. (HKG:1541) can tell us which group is most powerful. We can see that institutions own the lion's share in the company with 26% ownership. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

And so it follows that institutional investors was the group most impacted after the company's market cap fell to HK$1.7b last week after a 42% drop in the share price. The recent loss, which adds to a one-year loss of 77% for stockholders, may not sit well with this group of investors. Often called “market movers", institutions wield significant power in influencing the price dynamics of any stock. As a result, if the decline continues, institutional investors may be pressured to sell ImmuneOnco Biopharmaceuticals (Shanghai) which might hurt individual investors.

In the chart below, we zoom in on the different ownership groups of ImmuneOnco Biopharmaceuticals (Shanghai).

View 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.

As you can see, institutional investors have a fair amount of stake in ImmuneOnco Biopharmaceuticals (Shanghai). 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. 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.

Hedge funds don't have many shares in ImmuneOnco Biopharmaceuticals (Shanghai). Looking at our data, we can see that the largest shareholder is the CEO Tian Wenzhi with 19% of shares outstanding. Meanwhile, the second and third largest shareholders, hold 13% and 11%, of the shares outstanding, respectively.

Our research also brought to light the fact that roughly 52% of the company is controlled by the top 5 shareholders suggesting that these owners wield significant influence on the business.

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 is some analyst coverage of the stock, but it could still become more well known, with time.

Insider Ownership Of ImmuneOnco Biopharmaceuticals (Shanghai)

The definition of company insiders can be subjective and does vary between jurisdictions. Our data reflects individual insiders, capturing board members at the very least. Company management run the business, but the CEO will answer to the board, even if he or she is a member of it.

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.

It seems insiders own a significant proportion of ImmuneOnco Biopharmaceuticals (Shanghai) Inc.. Insiders have a HK$333m stake in this HK$1.7b 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. 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 Equity Ownership

With a stake of 16%, private equity firms could influence the ImmuneOnco Biopharmaceuticals (Shanghai) board. 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 2 warning signs for ImmuneOnco Biopharmaceuticals (Shanghai) you should be aware of, and 1 of them is potentially serious.

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.