WuXi Biologics (Cayman) Inc.'s (HKG:2269) largest shareholders are individual investors with 50% ownership, institutions own 35%

Key Insights

• Significant control over WuXi Biologics (Cayman) by individual investors implies that the general public has more power to influence management and governance-related decisions
• 42% of the business is held by the top 25 shareholders
• Recent sales by insiders

Every investor in WuXi Biologics (Cayman) Inc. (HKG:2269) should be aware of the most powerful shareholder groups. We can see that individual investors own the lion's share in the company with 50% ownership. Put another way, the group faces the maximum upside potential (or downside risk).

Institutions, on the other hand, account for 35% of the company's stockholders. Insiders often own a large chunk of younger, smaller, companies while huge companies tend to have institutions as shareholders.

Let's delve deeper into each type of owner of WuXi Biologics (Cayman), beginning with the chart below.

View our latest analysis for WuXi Biologics (Cayman)

What Does The Institutional Ownership Tell Us About WuXi Biologics (Cayman)?

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.

We can see that WuXi Biologics (Cayman) does have institutional investors; and they hold a good portion of the company's stock. 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. When multiple institutions own a stock, there's always a risk that they are in a 'crowded trade'. When such a trade goes wrong, multiple parties may compete to sell stock fast. This risk is higher in a company without a history of growth. You can see WuXi Biologics (Cayman)'s historic earnings and revenue below, but keep in mind there's always more to the story.

We note that hedge funds don't have a meaningful investment in WuXi Biologics (Cayman). Wuxi Biologics Holdings Limited is currently the company's largest shareholder with 14% of shares outstanding. Meanwhile, the second and third largest shareholders, hold 4.5% and 3.4%, of the shares outstanding, respectively.

Our studies suggest that the top 25 shareholders collectively control less than half of the company's shares, meaning that the company's shares are widely disseminated and there is no dominant shareholder.

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

Insider Ownership Of WuXi Biologics (Cayman)

While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. 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.

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.

Our data suggests that insiders own under 1% of WuXi Biologics (Cayman) Inc. in their own names. But they may have an indirect interest through a corporate structure that we haven't picked up on. It is a very large company, so it would be surprising to see insiders own a large proportion of the company. Though their holding amounts to less than 1%, we can see that board members collectively own HK$250m worth of shares (at current prices). Arguably recent buying and selling is just as important to consider. You can click here to see if insiders have been buying or selling.

General Public Ownership

The general public, who are usually individual investors, hold a substantial 50% stake in WuXi Biologics (Cayman), suggesting it is a fairly popular stock. This size of ownership gives investors from the general public some collective power. They can and probably do influence decisions on executive compensation, dividend policies and proposed business acquisitions.

Private Company Ownership

It seems that Private Companies own 14%, of the WuXi Biologics (Cayman) stock. Private companies may be related parties. Sometimes insiders have an interest in a public company through a holding in a private company, rather than in their own capacity as an individual. While it's hard to draw any broad stroke conclusions, it is worth noting as an area for further research.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand WuXi Biologics (Cayman) better, we need to consider many other factors. Take risks for example - WuXi Biologics (Cayman) has 2 warning signs we think you should be aware of.

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.