Individual investors in CARsgen Therapeutics Holdings Limited (HKG:2171) are its biggest bettors, and their bets paid off as stock gained 6.7% last week

By
Simply Wall St
Published
February 24, 2022
SEHK:2171
Source: Shutterstock

A look at the shareholders of CARsgen Therapeutics Holdings Limited (HKG:2171) can tell us which group is most powerful. We can see that individual investors own the lion's share in the company with 43% ownership. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

As a result, individual investors collectively scored the highest last week as the company hit HK$10b market cap following a 6.7% gain in the stock.

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

Check out our latest analysis for CARsgen Therapeutics Holdings

ownership-breakdown
SEHK:2171 Ownership Breakdown February 24th 2022

What Does The Institutional Ownership Tell Us About CARsgen Therapeutics Holdings?

Many institutions measure their performance against an index that approximates the local market. So they usually pay more attention to companies that are included in major indices.

As you can see, institutional investors have a fair amount of stake in CARsgen Therapeutics Holdings. 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 CARsgen Therapeutics Holdings, (below). Of course, keep in mind that there are other factors to consider, too.

earnings-and-revenue-growth
SEHK:2171 Earnings and Revenue Growth February 24th 2022

CARsgen Therapeutics Holdings is not owned by hedge funds. The company's largest shareholder is Yijie Biotech Holdings Limited, with ownership of 35%. Zhi Yang is the second largest shareholder owning 5.9% of common stock, and Zhejiang Jolly Pharmaceutical Co.,LTD holds about 5.0% of the company stock.

To make our study more interesting, we found that the top 4 shareholders control more than half of the company which implies that this group has considerable sway over the company's decision-making.

While studying institutional ownership for a company can add value to your research, it is also a good practice to research analyst recommendations to get a deeper understand of a stock's expected performance. While there is some analyst coverage, the company is probably not widely covered. So it could gain more attention, down the track.

Insider Ownership Of CARsgen Therapeutics Holdings

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

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.

We can report that insiders do own shares in CARsgen Therapeutics Holdings Limited. The insiders have a meaningful stake worth HK$873m. Most would see this as a real positive. Most would say this shows alignment of interests between shareholders and the board. Still, it might be worth checking if those insiders have been selling.

General Public Ownership

With a 43% ownership, the general public, mostly comprising of individual investors, have some degree of sway over CARsgen Therapeutics Holdings. 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

Our data indicates that Private Companies hold 35%, of the company's shares. It might be worth looking deeper into this. If related parties, such as insiders, have an interest in one of these private companies, that should be disclosed in the annual report. Private companies may also have a strategic interest in the company.

Public Company Ownership

We can see that public companies hold 5.0% of the CARsgen Therapeutics Holdings 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:

It's always worth thinking about the different groups who own shares in a company. But to understand CARsgen Therapeutics Holdings better, we need to consider many other factors. Be aware that CARsgen Therapeutics Holdings is showing 2 warning signs in our investment analysis , and 1 of those is a bit unpleasant...

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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