Key Insights

• Hangzhou Bio-Sincerity Pharma-TechLtd's significant insider ownership suggests inherent interests in company's expansion
• The top 10 shareholders own 50% of the company
• Institutional ownership in Hangzhou Bio-Sincerity Pharma-TechLtd is 17%

To get a sense of who is truly in control of Hangzhou Bio-Sincerity Pharma-Tech Co.,Ltd. (SZSE:301096), 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 35% 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¥691m last week.

Let's take a closer look to see what the different types of shareholders can tell us about Hangzhou Bio-Sincerity Pharma-TechLtd.

What Does The Institutional Ownership Tell Us About Hangzhou Bio-Sincerity Pharma-TechLtd?

Institutional investors commonly compare their own returns to the returns of a commonly followed index. So they generally do consider buying larger companies that are included in the relevant benchmark index.

We can see that Hangzhou Bio-Sincerity Pharma-TechLtd does have institutional investors; and they hold a good portion of the company's stock. This can indicate that the company has a certain degree of credibility in the investment community. However, it is best to be wary of relying on the supposed validation that comes with institutional investors. They too, get it wrong sometimes. 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 Hangzhou Bio-Sincerity Pharma-TechLtd, (below). Of course, keep in mind that there are other factors to consider, too.

Hangzhou Bio-Sincerity Pharma-TechLtd is not owned by hedge funds. Our data shows that Chunneng Shao is the largest shareholder with 19% of shares outstanding. Jinfang Lou is the second largest shareholder owning 12% of common stock, and Hangzhou Qinghai Management Consulting Partnership Enterprise (Limited Partnership) holds about 3.4% of the company stock. Jinfang Lou, who is the second-largest shareholder, also happens to hold the title of Chief Executive Officer.

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.

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. Quite a few analysts cover the stock, so you could look into forecast growth quite easily.

Insider Ownership Of Hangzhou Bio-Sincerity Pharma-TechLtd

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 information suggests that insiders maintain a significant holding in Hangzhou Bio-Sincerity Pharma-Tech Co.,Ltd.. Insiders own CN¥1.5b worth of shares in the CN¥4.4b company. It is great to see insiders so invested in the business. It might be worth checking if those insiders have been buying recently.

General Public Ownership

With a 33% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Hangzhou Bio-Sincerity Pharma-TechLtd. 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 14%, 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:

While it is well worth considering the different groups that own a company, there are other factors that are even more important. Case in point: We've spotted 2 warning signs for Hangzhou Bio-Sincerity Pharma-TechLtd you should be aware of, and 1 of them can't be ignored.

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.

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