China Medical System Holdings Limited's (HKG:867) CEO Kong Lam is the most upbeat insider, and their holdings increased by 4.6% last week

Key Insights

• Insiders appear to have a vested interest in China Medical System Holdings' growth, as seen by their sizeable ownership
• The top 2 shareholders own 51% of the company
• Institutions own 18% of China Medical System Holdings

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To get a sense of who is truly in control of China Medical System Holdings Limited (HKG:867), it is important to understand the ownership structure of the business. The group holding the most number of shares in the company, around 52% to be precise, is individual insiders. 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, insiders scored the highest last week as the company hit HK$25b market cap following a 4.6% gain in the stock.

Let's delve deeper into each type of owner of China Medical System Holdings, beginning with the chart below.

Check out our latest analysis for China Medical System Holdings

What Does The Institutional Ownership Tell Us About China Medical System 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.

China Medical System Holdings 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. If multiple institutions change their view on a stock at the same time, you could see the share price drop fast. It's therefore worth looking at China Medical System Holdings' earnings history below. Of course, the future is what really matters.

Hedge funds don't have many shares in China Medical System Holdings. With a 48% stake, CEO Kong Lam is the largest shareholder. Meanwhile, the second and third largest shareholders, hold 2.9% and 2.2%, of the shares outstanding, respectively. Interestingly, the second-largest shareholder, Hongbing Chen is also Senior Key Executive, again, pointing towards strong insider ownership amongst the company's top shareholders.

To make our study more interesting, we found that the top 2 shareholders have a majority ownership in the company, meaning that they are powerful enough to influence the decisions of the company.

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. There are a reasonable number of analysts covering the stock, so it might be useful to find out their aggregate view on the future.

Insider Ownership Of China Medical System Holdings

While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. Company management run the business, but the CEO will answer to the board, even if he or she is a member of it.

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.

It seems that insiders own more than half the China Medical System Holdings Limited stock. This gives them a lot of power. That means insiders have a very meaningful HK$13b stake in this HK$25b business. It is good to see this level of investment. You can check here to see if those insiders have been selling any of their shares.

General Public Ownership

With a 31% ownership, the general public, mostly comprising of individual investors, have some degree of sway over China Medical System Holdings. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.

Next Steps:

While it is well worth considering the different groups that own a company, there are other factors that are even more important.

Many find it useful to take an in depth look at how a company has performed in the past. You can access this detailed graph of past earnings, revenue and cash flow.

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.