Key Insights

• Anhui Huaheng Biotechnology's significant individual investors ownership suggests that the key decisions are influenced by shareholders from the larger public
• The top 10 shareholders own 50% of the company
• Insider ownership in Anhui Huaheng Biotechnology is 31%

To get a sense of who is truly in control of Anhui Huaheng Biotechnology Co., Ltd. (SHSE:688639), it is important to understand the ownership structure of the business. We can see that individual investors own the lion's share in the company with 34% ownership. Put another way, the group faces the maximum upside potential (or downside risk).

While insiders who own 31% came under pressure after market cap dropped to CN¥9.1b last week,individual investors took the most losses.

In the chart below, we zoom in on the different ownership groups of Anhui Huaheng Biotechnology.

What Does The Institutional Ownership Tell Us About Anhui Huaheng Biotechnology?

Many institutions measure their performance against an index that approximates the local market. So they usually pay more attention to companies that are included in major indices.

Anhui Huaheng Biotechnology already has institutions on the share registry. Indeed, they own a respectable stake in the company. This suggests some credibility amongst professional investors. But we can't rely on that fact alone since institutions make bad investments sometimes, just like everyone does. 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 Anhui Huaheng Biotechnology, (below). Of course, keep in mind that there are other factors to consider, too.

Hedge funds don't have many shares in Anhui Huaheng Biotechnology. With a 23% stake, CEO Henghua Guo is the largest shareholder. In comparison, the second and third largest shareholders hold about 10.0% and 3.3% of the stock. Interestingly, the third-largest shareholder, Xueli Zhang is also a Member of the Board of Directors, again, indicating strong insider ownership amongst the company's top shareholders.

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.

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 Anhui Huaheng Biotechnology

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.

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.

Our information suggests that insiders maintain a significant holding in Anhui Huaheng Biotechnology Co., Ltd.. It is very interesting to see that insiders have a meaningful CN¥2.9b stake in this CN¥9.1b business. Most would be pleased to see the board is investing alongside them. You may wish to access this free chart showing recent trading by insiders.

General Public Ownership

With a 34% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Anhui Huaheng Biotechnology. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.

Private Company Ownership

We can see that Private Companies own 10.0%, of the shares on issue. 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:

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 3 warning signs for Anhui Huaheng Biotechnology (of which 1 is concerning!) 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.

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