InnoCare Pharma Limited's (HKG:9969) 4.9% loss last week hit both individual investors who own 36% as well as institutions

Key Insights

• The considerable ownership by retail investors in InnoCare Pharma indicates that they collectively have a greater say in management and business strategy
• 50% of the business is held by the top 10 shareholders
• 23% of InnoCare Pharma is held by insiders

A look at the shareholders of InnoCare Pharma Limited (HKG:9969) can tell us which group is most powerful. And the group that holds the biggest piece of the pie are retail investors with 36% ownership. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

While institutions who own 24% came under pressure after market cap dropped to HK$9.1b last week,retail investors took the most losses.

In the chart below, we zoom in on the different ownership groups of InnoCare Pharma.

View our latest analysis for InnoCare Pharma

What Does The Institutional Ownership Tell Us About InnoCare Pharma?

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 InnoCare Pharma. 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. 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 InnoCare Pharma's earnings history below. Of course, the future is what really matters.

Our data indicates that hedge funds own 12% of InnoCare Pharma. That worth noting, since hedge funds are often quite active investors, who may try to influence management. Many want to see value creation (and a higher share price) in the short term or medium term. Our data shows that HHLR Advisors, Ltd. is the largest shareholder with 12% of shares outstanding. For context, the second largest shareholder holds about 8.9% of the shares outstanding, followed by an ownership of 8.0% by the third-largest shareholder. Renbin Zhao, who is the third-largest shareholder, also happens to hold the title of Member of the Board of Directors. In addition, we found that Jisong Cui, the CEO has 5.7% of the shares allocated to their name.

We did some more digging and found that 10 of the top shareholders account for roughly 50% of the register, implying that along with larger shareholders, there are a few smaller shareholders, thereby balancing out each others interests somewhat.

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 plenty of analysts covering the stock, so it might be worth seeing what they are forecasting, too.

Insider Ownership Of InnoCare Pharma

The definition of company insiders can be subjective and does vary between jurisdictions. Our data reflects individual insiders, capturing board members at the very least. 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 most recent data indicates that insiders own a reasonable proportion of InnoCare Pharma Limited. Insiders own HK$2.1b worth of shares in the HK$9.1b company. That's quite meaningful. It is good to see this level of investment. You can check here to see if those insiders have been buying recently.

General Public Ownership

The general public, who are usually individual investors, hold a 36% stake in InnoCare Pharma. 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 Company Ownership

Our data indicates that Private Companies hold 4.7%, 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.

Next Steps:

While it is well worth considering the different groups that own a company, there are other factors that are even more important. Consider risks, for instance. Every company has them, and we've spotted 1 warning sign for InnoCare Pharma you should know about.

But ultimately it is the future, not the past, that will determine how well the owners of this business will do. Therefore we think it advisable to take a look at this free report showing whether analysts are predicting a brighter 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.

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