Could The Consun Pharmaceutical Group Limited (HKG:1681) Ownership Structure Tell Us Something Useful?

By
Simply Wall St
Published
March 16, 2022
SEHK:1681
Source: Shutterstock

If you want to know who really controls Consun Pharmaceutical Group Limited (HKG:1681), then you'll have to look at the makeup of its share registry. Institutions will often hold stock in bigger companies, and we expect to see insiders owning a noticeable percentage of the smaller ones. I quite like to see at least a little bit of insider ownership. As Charlie Munger said 'Show me the incentive and I will show you the outcome.

Consun Pharmaceutical Group is not a large company by global standards. It has a market capitalization of HK$2.4b, which means it wouldn't have the attention of many institutional investors. In the chart below, we can see that institutions are noticeable on the share registry. Let's delve deeper into each type of owner, to discover more about Consun Pharmaceutical Group.

Check out our latest analysis for Consun Pharmaceutical Group

ownership-breakdown
SEHK:1681 Ownership Breakdown March 16th 2022

What Does The Institutional Ownership Tell Us About Consun Pharmaceutical Group?

Institutional investors commonly compare their own returns to the returns of a commonly followed index. So they generally do consider buying larger companies that are included in the relevant benchmark index.

Consun Pharmaceutical Group 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. 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 Consun Pharmaceutical Group's earnings history below. Of course, the future is what really matters.

earnings-and-revenue-growth
SEHK:1681 Earnings and Revenue Growth March 16th 2022

Consun Pharmaceutical Group is not owned by hedge funds. The company's largest shareholder is Yubao An, with ownership of 26%. With 17% and 14% of the shares outstanding respectively, Qian Li and Wai Po Young are the second and third largest shareholders. Qian Li, who is the second-largest shareholder, also happens to hold the title of Chief Executive Officer.

A more detailed study of the shareholder registry showed us that 3 of the top shareholders have a considerable amount of ownership in the company, via their 57% stake.

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. Our information suggests that there isn't any analyst coverage of the stock, so it is probably little known.

Insider Ownership Of Consun Pharmaceutical Group

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. 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.

It seems that insiders own more than half the Consun Pharmaceutical Group Limited stock. This gives them a lot of power. That means they own HK$1.4b worth of shares in the HK$2.4b company. That's quite meaningful. 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 32% stake in the company, and hence can't easily be ignored. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand Consun Pharmaceutical Group better, we need to consider many other factors. To that end, you should be aware of the 2 warning signs we've spotted with Consun Pharmaceutical Group .

Of course this may not be the best stock to buy. So take a peek at this free free list of interesting companies.

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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