Key Insights

• Insiders appear to have a vested interest in Shenzhen Kangtai Biological Products' growth, as seen by their sizeable ownership
• 50% of the business is held by the top 6 shareholders
• Ownership research along with analyst forecasts data help provide a good understanding of opportunities in a stock

To get a sense of who is truly in control of Shenzhen Kangtai Biological Products Co., Ltd. (SZSE:300601), it is important to understand the ownership structure of the business. And the group that holds the biggest piece of the pie are individual insiders with 48% ownership. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

Clearly, insiders benefitted the most after the company's market cap rose by CN¥570m last week.

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

What Does The Institutional Ownership Tell Us About Shenzhen Kangtai Biological Products?

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.

We can see that Shenzhen Kangtai Biological Products 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. If multiple institutions change their view on a stock at the same time, you could see the share price drop fast. It's therefore worth looking at Shenzhen Kangtai Biological Products' earnings history below. Of course, the future is what really matters.

We note that hedge funds don't have a meaningful investment in Shenzhen Kangtai Biological Products. Looking at our data, we can see that the largest shareholder is Weimin Du with 25% of shares outstanding. Liping Yuan is the second largest shareholder owning 19% of common stock, and Haifa Zheng holds about 2.2% of the company stock.

We also observed that the top 6 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 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 Kangtai Biological Products

While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. The company management answer to the board and the latter should represent the interests of shareholders. Notably, sometimes top-level managers are on the board themselves.

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 most recent data indicates that insiders own a reasonable proportion of Shenzhen Kangtai Biological Products Co., Ltd.. It has a market capitalization of just CN¥17b, and insiders have CN¥8.4b worth of shares in their own names. That's quite significant. 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 43% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Shenzhen Kangtai Biological Products. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand Shenzhen Kangtai Biological Products better, we need to consider many other factors. To that end, you should be aware of the 2 warning signs we've spotted with Shenzhen Kangtai Biological Products .

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