Ascletis Pharma Inc. (HKG:1672) CEO Jinzi Jason Wu, the company's largest shareholder sees 7.9% reduction in holdings value

Key Insights

• Ascletis Pharma's significant insider ownership suggests inherent interests in company's expansion
• 54% of the company is held by a single shareholder (Jinzi Jason Wu)
• Past performance of a company along with ownership data serve to give a strong idea about prospects for a business

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If you want to know who really controls Ascletis Pharma Inc. (HKG:1672), then you'll have to look at the makeup of its share registry. And the group that holds the biggest piece of the pie are individual insiders with 65% ownership. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

And following last week's 7.9% decline in share price, insiders suffered the most losses.

Let's take a closer look to see what the different types of shareholders can tell us about Ascletis Pharma.

See our latest analysis for Ascletis Pharma

What Does The Lack Of Institutional Ownership Tell Us About Ascletis Pharma?

We don't tend to see institutional investors holding stock of companies that are very risky, thinly traded, or very small. Though we do sometimes see large companies without institutions on the register, it's not particularly common.

There are many reasons why a company might not have any institutions on the share registry. It may be hard for institutions to buy large amounts of shares, if liquidity (the amount of shares traded each day) is low. If the company has not needed to raise capital, institutions might lack the opportunity to build a position. It is also possible that fund managers don't own the stock because they aren't convinced it will perform well. Ascletis Pharma's earnings and revenue track record (below) may not be compelling to institutional investors -- or they simply might not have looked at the business closely.

Ascletis Pharma is not owned by hedge funds. Looking at our data, we can see that the largest shareholder is the CEO Jinzi Jason Wu with 54% of shares outstanding. This essentially means that they have significant control over the outcome or future of the company, which is why insider ownership is usually looked upon favourably by prospective buyers. Yang Dan is the second largest shareholder owning 11% of common stock, and Lakemont Holding Llc holds about 8.6% of the company stock.

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 Ascletis Pharma

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. 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.

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.

It seems that insiders own more than half the Ascletis Pharma Inc. stock. This gives them a lot of power. Given it has a market cap of HK$5.8b, that means they have HK$3.8b worth of shares. Most would argue this is a positive, showing strong alignment with shareholders. You can click here to see if those insiders have been buying or selling.

General Public Ownership

The general public-- including retail investors -- own 13% 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 Company Ownership

It seems that Private Companies own 22%, of the Ascletis Pharma stock. 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.

Next Steps:

While it is well worth considering the different groups that own a company, there are other factors that are even more important. Be aware that Ascletis Pharma is showing 3 warning signs in our investment analysis , and 2 of those are concerning...

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. 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.