Key Insights

• Significant control over Yantai Zhenghai Biotechnology by individual investors implies that the general public has more power to influence management and governance-related decisions
• 50% of the business is held by the top 8 shareholders
• 42% of Yantai Zhenghai Biotechnology is held by insiders

A look at the shareholders of Yantai Zhenghai Biotechnology Co., Ltd. (SZSE:300653) can tell us which group is most powerful. The group holding the most number of shares in the company, around 43% to be precise, is individual investors. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

Following a 14% increase in the stock price last week, individual investors profited the most, but insiders who own 42% stock also stood to gain from the increase.

Let's delve deeper into each type of owner of Yantai Zhenghai Biotechnology, beginning with the chart below.

What Does The Institutional Ownership Tell Us About Yantai Zhenghai 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.

Yantai Zhenghai Biotechnology already has institutions on the share registry. Indeed, they own a respectable stake in the company. 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. 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 Yantai Zhenghai Biotechnology, (below). Of course, keep in mind that there are other factors to consider, too.

Yantai Zhenghai Biotechnology is not owned by hedge funds. The company's largest shareholder is Bohai Mi, with ownership of 34%. Meanwhile, the second and third largest shareholders, hold 7.7% and 2.1%, of the shares outstanding, respectively.

On further inspection, we found that more than half the company's shares are owned by the top 8 shareholders, suggesting that the interests of the larger shareholders are balanced out to an extent by the smaller ones.

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 is a little analyst coverage of the stock, but not much. So there is room for it to gain more coverage.

Insider Ownership Of Yantai Zhenghai Biotechnology

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.

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 Yantai Zhenghai Biotechnology Co., Ltd.. It has a market capitalization of just CN¥4.4b, and insiders have CN¥1.8b worth of shares in their own names. We would say this shows alignment with shareholders, but it is worth noting that the company is still quite small; some insiders may have founded the business. You can click here to see if those insiders have been buying or selling.

General Public Ownership

With a 43% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Yantai Zhenghai Biotechnology. 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.

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 risks, for instance. Every company has them, and we've spotted 1 warning sign for Yantai Zhenghai Biotechnology 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.