Shanghai Junshi Biosciences Co., Ltd. (HKG:1877) surges 8.2%; individual investors who own 49% shares profited along with institutions

Key Insights

• Shanghai Junshi Biosciences' significant individual investors ownership suggests that the key decisions are influenced by shareholders from the larger public
• 48% of the business is held by the top 25 shareholders
• 18% of Shanghai Junshi Biosciences is held by insiders

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A look at the shareholders of Shanghai Junshi Biosciences Co., Ltd. (HKG:1877) can tell us which group is most powerful. The group holding the most number of shares in the company, around 49% to be precise, is individual investors. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

Individual investors gained the most after market cap touched HK$39b last week, while institutions who own 20% also benefitted.

In the chart below, we zoom in on the different ownership groups of Shanghai Junshi Biosciences.

Check out our latest analysis for Shanghai Junshi Biosciences

What Does The Institutional Ownership Tell Us About Shanghai Junshi Biosciences?

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.

Shanghai Junshi Biosciences already has institutions on the share registry. Indeed, they own a respectable stake in the company. This implies the analysts working for those institutions have looked at the stock and they like it. But just like anyone else, they could be wrong. 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 Shanghai Junshi Biosciences, (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 Shanghai Junshi Biosciences. From our data, we infer that the largest shareholder is Jun Xiong (who also holds the title of Top Key Executive) with 13% of shares outstanding. Its usually considered a good sign when insiders own a significant number of shares in the company, and in this case, we're glad to see a company insider play the role of a key stakeholder. For context, the second largest shareholder holds about 8.5% of the shares outstanding, followed by an ownership of 4.2% by the third-largest shareholder.

A deeper look at our ownership data shows that the top 25 shareholders collectively hold less than half of the register, suggesting a large group of small holders where no single shareholder has a majority.

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. Quite a few analysts cover the stock, so you could look into forecast growth quite easily.

Insider Ownership Of Shanghai Junshi Biosciences

The definition of an insider can differ slightly between different countries, but members of the board of directors always count. 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.

I generally consider insider ownership to be a good thing. However, on some occasions it makes it more difficult for other shareholders to hold the board accountable for decisions.

Our information suggests that insiders maintain a significant holding in Shanghai Junshi Biosciences Co., Ltd.. It has a market capitalization of just HK$39b, and insiders have HK$7.2b worth of shares in their own names. That's quite significant. Most would be pleased to see the board is investing alongside them. You may wish to access this free chart showing recent trading by insiders.

General Public Ownership

With a 49% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Shanghai Junshi Biosciences. 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 Equity Ownership

Private equity firms hold a 8.5% stake in Shanghai Junshi Biosciences. This suggests they can be influential in key policy decisions. 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:

It's always worth thinking about the different groups who own shares in a company. But to understand Shanghai Junshi Biosciences better, we need to consider many other factors. Case in point: We've spotted 2 warning signs for Shanghai Junshi Biosciences you should be aware of.

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.