Do Institutions Own YiChang HEC ChangJiang Pharmaceutical Co., Ltd. (HKG:1558) Shares?

A look at the shareholders of YiChang HEC ChangJiang Pharmaceutical Co., Ltd. (HKG:1558) can tell us which group is most powerful. Institutions often own shares in more established companies, while it's not unusual to see insiders own a fair bit of smaller companies. Companies that have been privatized tend to have low insider ownership.

With a market capitalization of HK$7.4b, YiChang HEC ChangJiang Pharmaceutical is a decent size, so it is probably on the radar of institutional investors. Our analysis of the ownership of the company, below, shows that institutions own shares in the company. Let's delve deeper into each type of owner, to discover more about YiChang HEC ChangJiang Pharmaceutical.

Check out our latest analysis for YiChang HEC ChangJiang Pharmaceutical

What Does The Institutional Ownership Tell Us About YiChang HEC ChangJiang Pharmaceutical?

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 YiChang HEC ChangJiang Pharmaceutical. 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 YiChang HEC ChangJiang Pharmaceutical'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 YiChang HEC ChangJiang Pharmaceutical. Guangdong Hec Technologyholding Co., Ltd is currently the company's largest shareholder with 53% of shares outstanding. This essentially means that they have extensive influence, if not outright control, over the future of the corporation. Pacific Asset Management Co., Ltd. is the second largest shareholder owning 3.7% of common stock, and LSV Asset Management holds about 3.5% of the company stock.

Researching institutional ownership is a good way to gauge and filter a stock's expected performance. The same can be achieved by studying analyst sentiments. There are plenty of analysts covering the stock, so it might be worth seeing what they are forecasting, too.

Insider Ownership Of YiChang HEC ChangJiang Pharmaceutical

The definition of an insider can differ slightly between different countries, but members of the board of directors always count. Company management run the business, but the CEO will answer to the board, even if he or she is a member of it.

Insider ownership is positive when it signals leadership are thinking like the true owners of the company. However, high insider ownership can also give immense power to a small group within the company. This can be negative in some circumstances.

Our most recent data indicates that insiders own some shares in YiChang HEC ChangJiang Pharmaceutical Co., Ltd.. As individuals, the insiders collectively own HK$102m worth of the HK$7.4b company. It is good to see some investment by insiders, but it might be worth checking if those insiders have been buying.

General Public Ownership

With a 27% ownership, the general public have some degree of sway over YiChang HEC ChangJiang Pharmaceutical. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.

Public Company Ownership

We can see that public companies hold 56% of the YiChang HEC ChangJiang Pharmaceutical shares on issue. This may be a strategic interest and the two companies may have related business interests. It could be that they have de-merged. This holding is probably worth investigating further.

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 YiChang HEC ChangJiang Pharmaceutical you should be aware of, and 1 of them can't be ignored.

If you are like me, you may want to think about whether this company will grow or shrink. Luckily, you can check this free report showing analyst forecasts for its future.

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. 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.
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