- Hong Kong
- Life Sciences
Individual investors invested in Viva Biotech Holdings (HKG:1873) copped the brunt of last week's HK$401m market cap decline
- Significant control over Viva Biotech Holdings by individual investors implies that the general public has more power to influence management and governance-related decisions
- A total of 13 investors have a majority stake in the company with 51% ownership
- Insiders own 33% of Viva Biotech Holdings
Every investor in Viva Biotech Holdings (HKG:1873) should be aware of the most powerful shareholder groups. And the group that holds the biggest piece of the pie are individual investors with 46% ownership. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).
While insiders, who own 33% shares weren’t spared from last week’s HK$401m market cap drop, individual investors as a group suffered the maximum losses
Let's take a closer look to see what the different types of shareholders can tell us about Viva Biotech Holdings.
See our latest analysis for Viva Biotech Holdings
What Does The Institutional Ownership Tell Us About Viva Biotech Holdings?
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.
Viva Biotech Holdings 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. It is not uncommon to see a big share price drop if two large institutional investors try to sell out of a stock at the same time. So it is worth checking the past earnings trajectory of Viva Biotech Holdings, (below). Of course, keep in mind that there are other factors to consider, too.
We note that hedge funds don't have a meaningful investment in Viva Biotech Holdings. Looking at our data, we can see that the largest shareholder is Jiong Wu with 12% of shares outstanding. In comparison, the second and third largest shareholders hold about 10% and 7.9% of the stock. Chen Cheney Mao, who is the second-largest shareholder, also happens to hold the title of Chief Executive Officer.
Looking at the shareholder registry, we can see that 51% of the ownership is controlled by the top 13 shareholders, meaning that no single shareholder has a majority interest in the ownership.
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. We're not picking up on any analyst coverage of the stock at the moment, so the company is unlikely to be widely held.
Insider Ownership Of Viva Biotech Holdings
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.
It seems insiders own a significant proportion of Viva Biotech Holdings. Insiders own HK$919m worth of shares in the HK$2.8b company. It is great to see insiders so invested in the business. It might be worth checking if those insiders have been buying recently.
General Public Ownership
With a 46% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Viva Biotech Holdings. 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 Company Ownership
Our data indicates that Private Companies hold 12%, of the company's shares. 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.
It's always worth thinking about the different groups who own shares in a company. But to understand Viva Biotech Holdings better, we need to consider many other factors. To that end, you should learn about the 2 warning signs we've spotted with Viva Biotech Holdings (including 1 which is a bit concerning) .
Of course this may not be the best stock to buy. Therefore, you may wish to see our free collection of interesting prospects boasting favorable financials.
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.
Viva Biotech Holdings
Viva Biotech Holdings, an investment holding company, provides structure-based drug discovery services to biotechnology and pharmaceutical customers worldwide.
Slightly overvalued with questionable track record.