Key Insights

• Shenzhen YHLO Biotech's significant insider ownership suggests inherent interests in company's expansion
• 50% of the business is held by the top 2 shareholders
• Institutional ownership in Shenzhen YHLO Biotech is 23%

A look at the shareholders of Shenzhen YHLO Biotech Co., Ltd. (SHSE:688575) can tell us which group is most powerful. And the group that holds the biggest piece of the pie are individual insiders with 48% ownership. Put another way, the group faces the maximum upside potential (or downside risk).

As market cap fell to CN¥13b last week, insiders would have faced the highest losses than any other shareholder groups of the company.

Let's take a closer look to see what the different types of shareholders can tell us about Shenzhen YHLO Biotech.

What Does The Institutional Ownership Tell Us About Shenzhen YHLO Biotech?

Institutional investors commonly compare their own returns to the returns of a commonly followed index. So they generally do consider buying larger companies that are included in the relevant benchmark index.

Shenzhen YHLO Biotech already has institutions on the share registry. Indeed, they own a respectable stake in the company. 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 Shenzhen YHLO Biotech, (below). Of course, keep in mind that there are other factors to consider, too.

Shenzhen YHLO Biotech is not owned by hedge funds. Because actions speak louder than words, we consider it a good sign when insiders own a significant stake in a company. In Shenzhen YHLO Biotech's case, its Secretary, Kunhui Hu, is the largest shareholder, holding 47% of shares outstanding. Shenzhen Qianhai Ruixin Investment Management Co., Ltd. is the second largest shareholder owning 2.9% of common stock, and Shenzhen Huadesai Investment Consulting Partnership (Limited Partnership) holds about 2.9% of the company stock.

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. 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 Shenzhen YHLO Biotech

The definition of an insider can differ slightly between different countries, but members of the board of directors always count. 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 information suggests that insiders maintain a significant holding in Shenzhen YHLO Biotech Co., Ltd.. It has a market capitalization of just CN¥13b, and insiders have CN¥6.4b worth of shares in their own names. That's quite significant. 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

With a 23% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Shenzhen YHLO Biotech. 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

It seems that Private Companies own 5.5%, of the Shenzhen YHLO Biotech stock. 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. Like risks, for instance. Every company has them, and we've spotted 2 warning signs for Shenzhen YHLO Biotech (of which 1 doesn't sit too well with us!) you should know about.

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.