Kyongbo Pharmaceutical Co., Ltd's (KRX:214390) biggest owners are public companies who got richer after stock soared 13% last week

Key Insights

• Kyongbo Pharmaceutical's significant public companies ownership suggests that the key decisions are influenced by shareholders from the larger public
• The top 2 shareholders own 60% of the company
• 17% of Kyongbo Pharmaceutical is held by insiders

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Every investor in Kyongbo Pharmaceutical Co., Ltd (KRX:214390) should be aware of the most powerful shareholder groups. We can see that public companies own the lion's share in the company with 43% ownership. Put another way, the group faces the maximum upside potential (or downside risk).

As a result, public companies were the biggest beneficiaries of last week’s 13% gain.

In the chart below, we zoom in on the different ownership groups of Kyongbo Pharmaceutical.

Check out our latest analysis for Kyongbo Pharmaceutical

What Does The Lack Of Institutional Ownership Tell Us About Kyongbo Pharmaceutical?

Institutional investors often avoid companies that are too small, too illiquid or too risky for their tastes. But it's unusual to see larger companies without any institutional investors.

There are multiple explanations for why institutions don't own a stock. The most common is that the company is too small relative to funds under management, so the institution does not bother to look closely at the company. It is also possible that fund managers don't own the stock because they aren't convinced it will perform well. Kyongbo Pharmaceutical's earnings and revenue track record (below) may not be compelling to institutional investors -- or they simply might not have looked at the business closely.

Kyongbo Pharmaceutical is not owned by hedge funds. The company's largest shareholder is Chong Kun Dang Holdings Corp., with ownership of 43%. Meanwhile, the second and third largest shareholders, hold 17% and 1.2%, of the shares outstanding, respectively.

After doing some more digging, we found that the top 2 shareholders collectively control more than half of the company's shares, implying that they have considerable power to influence the company's decisions.

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 Kyongbo Pharmaceutical

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.

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.

Our information suggests that insiders maintain a significant holding in Kyongbo Pharmaceutical Co., Ltd. It has a market capitalization of just ₩157b, and insiders have ₩27b worth of shares in their own names. We would say this shows alignment with shareholders, but it is worth noting that the company is still quite small; some insiders may have founded the business. You can click here to see if those insiders have been buying or selling.

General Public Ownership

The general public, who are usually individual investors, hold a 38% stake in Kyongbo Pharmaceutical. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.

Public Company Ownership

Public companies currently own 43% of Kyongbo Pharmaceutical stock. It's hard to say for sure but this suggests they have entwined business interests. This might be a strategic stake, so it's worth watching this space for changes in ownership.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand Kyongbo Pharmaceutical better, we need to consider many other factors. For instance, we've identified 3 warning signs for Kyongbo Pharmaceutical (2 are a bit concerning) that you should be aware of.

If you would prefer check out another company -- one with potentially superior financials -- then do not miss this free list of interesting companies, backed by strong financial data.

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.