Key Insights

• Significant control over Zhejiang Wolwo Bio-Pharmaceutical by private companies implies that the general public has more power to influence management and governance-related decisions
• 57% of the business is held by the top 3 shareholders
• Insiders own 11% of Zhejiang Wolwo Bio-Pharmaceutical

A look at the shareholders of Zhejiang Wolwo Bio-Pharmaceutical Co., Ltd. (SZSE:300357) can tell us which group is most powerful. The group holding the most number of shares in the company, around 39% to be precise, is private companies. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

As a result, private companies collectively scored the highest last week as the company hit CN¥10b market cap following a 4.2% gain in the stock.

Let's delve deeper into each type of owner of Zhejiang Wolwo Bio-Pharmaceutical, beginning with the chart below.

What Does The Institutional Ownership Tell Us About Zhejiang Wolwo Bio-Pharmaceutical?

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.

Zhejiang Wolwo Bio-Pharmaceutical 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. 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 Zhejiang Wolwo Bio-Pharmaceutical's historic earnings and revenue below, but keep in mind there's always more to the story.

Zhejiang Wolwo Bio-Pharmaceutical is not owned by hedge funds. Zhejiang Wolwo Management Consulting Co., Ltd. is currently the company's largest shareholder with 39% of shares outstanding. Meanwhile, the second and third largest shareholders, hold 9.9% and 8.3%, of the shares outstanding, respectively. Gengxi Hu, who is the third-largest shareholder, also happens to hold the title of Chairman of the Board.

After doing some more digging, we found that the top 3 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 plenty of analysts covering the stock, so it might be worth seeing what they are forecasting, too.

Insider Ownership Of Zhejiang Wolwo Bio-Pharmaceutical

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 Zhejiang Wolwo Bio-Pharmaceutical Co., Ltd.. Insiders own CN¥1.1b worth of shares in the CN¥10b company. That's quite meaningful. 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

The general public-- including retail investors -- own 22% stake in the company, and hence can't easily be ignored. 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 39%, 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:

It's always worth thinking about the different groups who own shares in a company. But to understand Zhejiang Wolwo Bio-Pharmaceutical better, we need to consider many other factors. Consider for instance, the ever-present spectre of investment risk. We've identified 1 warning sign with Zhejiang Wolwo Bio-Pharmaceutical , and understanding them should be part of your investment process.

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