Wuhan YZY Biopharma Co., Ltd.'s (HKG:2496) market cap surged HK$174m last week, public companies who have a lot riding on the company were rewarded

Key Insights

• The considerable ownership by public companies in Wuhan YZY Biopharma indicates that they collectively have a greater say in management and business strategy
• The top 4 shareholders own 51% of the company
• Insiders own 20% of Wuhan YZY Biopharma

A look at the shareholders of Wuhan YZY Biopharma Co., Ltd. (HKG:2496) can tell us which group is most powerful. We can see that public companies own the lion's share in the company with 26% ownership. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

Clearly, public companies benefitted the most after the company's market cap rose by HK$174m last week.

In the chart below, we zoom in on the different ownership groups of Wuhan YZY Biopharma.

View our latest analysis for Wuhan YZY Biopharma

What Does The Institutional Ownership Tell Us About Wuhan YZY Biopharma?

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.

As you can see, institutional investors have a fair amount of stake in Wuhan YZY Biopharma. This can indicate that the company has a certain degree of credibility in the investment community. However, it is best to be wary of relying on the supposed validation that comes with institutional investors. They too, get it wrong sometimes. 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 Wuhan YZY Biopharma, (below). Of course, keep in mind that there are other factors to consider, too.

Hedge funds don't have many shares in Wuhan YZY Biopharma. CSPC Pharmaceutical Group Limited is currently the largest shareholder, with 26% of shares outstanding. Qian Yuan is the second largest shareholder owning 11% of common stock, and Wuhan YZY Biopharma Co., Ltd, ESOP holds about 8.7% of the company stock. Furthermore, CEO Pengfei Zhou is the owner of 3.5% of the company's shares.

On looking further, we found that 51% of the shares are owned by the top 4 shareholders. In other words, these shareholders have a meaningful say in the decisions of the company.

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

Insider Ownership Of Wuhan YZY Biopharma

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.

Insider ownership is positive when it signals leadership are thinking like the true owners of the company. However, high insider ownership can also give immense power to a small group within the company. This can be negative in some circumstances.

It seems insiders own a significant proportion of Wuhan YZY Biopharma Co., Ltd.. Insiders have a HK$318m stake in this HK$1.6b business. 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

The general public, who are usually individual investors, hold a 11% stake in Wuhan YZY Biopharma. 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 Equity Ownership

With an ownership of 5.4%, private equity firms are in a position to play a role in shaping corporate strategy with a focus on value creation. Some investors might be encouraged by this, since private equity are sometimes able to encourage strategies that help the market see the value in the company. Alternatively, those holders might be exiting the investment after taking it public.

Private Company Ownership

Our data indicates that Private Companies hold 23%, 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.

Public Company Ownership

We can see that public companies hold 26% of the Wuhan YZY Biopharma 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:

I find it very interesting to look at who exactly owns a company. But to truly gain insight, we need to consider other information, too. For example, we've discovered 1 warning sign for Wuhan YZY Biopharma that you should be aware of before investing here.

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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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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com