Key Insights

• Porton Pharma Solutions' significant retail investors ownership suggests that the key decisions are influenced by shareholders from the larger public
• A total of 8 investors have a majority stake in the company with 50% ownership
• Insider ownership in Porton Pharma Solutions is 27%

If you want to know who really controls Porton Pharma Solutions Ltd. (SZSE:300363), then you'll have to look at the makeup of its share registry. With 39% stake, retail investors possess the maximum shares in the company. Put another way, the group faces the maximum upside potential (or downside risk).

While insiders who own 27% came under pressure after market cap dropped to CN¥6.5b last week,retail investors took the most losses.

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

What Does The Institutional Ownership Tell Us About Porton Pharma Solutions?

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.

We can see that Porton Pharma Solutions does have institutional investors; and they hold a good portion of the company's stock. 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. 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 Porton Pharma Solutions' historic earnings and revenue below, but keep in mind there's always more to the story.

Porton Pharma Solutions is not owned by hedge funds. Chongqing Liangjiang New Area Development & Investment Group Co.,Ltd. is currently the largest shareholder, with 14% of shares outstanding. With 11% and 8.1% of the shares outstanding respectively, Nianfeng Ju and Rong Tao are the second and third largest shareholders. Nianfeng Ju, who is the second-largest shareholder, also happens to hold the title of Chief Executive Officer.

We also observed that the top 8 shareholders account for more than half of the share register, with a few smaller shareholders to balance the interests of the larger ones to a certain extent.

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 Porton Pharma Solutions

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 insiders own a significant proportion of Porton Pharma Solutions Ltd.. Insiders own CN¥1.8b worth of shares in the CN¥6.5b company. This may suggest that the founders still own a lot of shares. You can click here to see if they have been buying or selling.

General Public Ownership

The general public, who are usually individual investors, hold a 39% stake in Porton Pharma Solutions. This size of ownership, while considerable, may not be enough to change company policy if the decision is not in sync with other large shareholders.

Private Company Ownership

We can see that Private Companies own 16%, of the shares on issue. 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:

I find it very interesting to look at who exactly owns a company. But to truly gain insight, we need to consider other information, too. Consider for instance, the ever-present spectre of investment risk. We've identified 1 warning sign with Porton Pharma Solutions , and understanding them should be part of your investment process.

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