Key Insights

• Fujian Wanchen Biotechnology Group's significant private companies ownership suggests that the key decisions are influenced by shareholders from the larger public
• A total of 3 investors have a majority stake in the company with 54% ownership
• Insider ownership in Fujian Wanchen Biotechnology Group is 15%

A look at the shareholders of Fujian Wanchen Biotechnology Group Co., Ltd. (SZSE:300972) can tell us which group is most powerful. And the group that holds the biggest piece of the pie are private companies with 45% ownership. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

Clearly, private companies benefitted the most after the company's market cap rose by CN¥514m last week.

In the chart below, we zoom in on the different ownership groups of Fujian Wanchen Biotechnology Group.

What Does The Institutional Ownership Tell Us About Fujian Wanchen Biotechnology Group?

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.

Fujian Wanchen Biotechnology Group 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. When multiple institutions own a stock, there's always a risk that they are in a 'crowded trade'. When such a trade goes wrong, multiple parties may compete to sell stock fast. This risk is higher in a company without a history of growth. You can see Fujian Wanchen Biotechnology Group's historic earnings and revenue below, but keep in mind there's always more to the story.

Hedge funds don't have many shares in Fujian Wanchen Biotechnology Group. Fujian Mimosa Agricultural Development Co., Ltd. is currently the largest shareholder, with 23% of shares outstanding. Zhangzhou Jinwanchen Investment Co., Ltd. is the second largest shareholder owning 17% of common stock, and Zening Wang holds about 14% of the company stock. Zening Wang, who is the third-largest shareholder, also happens to hold the title of Member of the Board of Directors.

To make our study more interesting, we found that the top 3 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. While there is some analyst coverage, the company is probably not widely covered. So it could gain more attention, down the track.

Insider Ownership Of Fujian Wanchen Biotechnology Group

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.

It seems insiders own a significant proportion of Fujian Wanchen Biotechnology Group Co., Ltd.. Insiders own CN¥828m worth of shares in the CN¥5.6b company. 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

With a 25% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Fujian Wanchen Biotechnology Group. 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 45%, of the company's shares. Private companies may be related parties. Sometimes insiders have an interest in a public company through a holding in a private company, rather than in their own capacity as an individual. While it's hard to draw any broad stroke conclusions, it is worth noting as an area for further research.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand Fujian Wanchen Biotechnology Group better, we need to consider many other factors. Take risks for example - Fujian Wanchen Biotechnology Group has 2 warning signs we think you should be aware of.

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.