Key Insights

• The considerable ownership by public companies in Changchun BCHT Biotechnology indicates that they collectively have a greater say in management and business strategy
• A total of 2 investors have a majority stake in the company with 67% ownership
• Insiders own 32% of Changchun BCHT Biotechnology

A look at the shareholders of Changchun BCHT Biotechnology Co. (SHSE:688276) can tell us which group is most powerful. And the group that holds the biggest piece of the pie are public companies with 41% ownership. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

While public companies were the group that benefitted the most from last week's CN¥467m market cap gain, insiders too had a 32% share in those profits.

In the chart below, we zoom in on the different ownership groups of Changchun BCHT Biotechnology.

What Does The Institutional Ownership Tell Us About Changchun BCHT Biotechnology?

Institutions typically measure themselves against a benchmark when reporting to their own investors, so they often become more enthusiastic about a stock once it's included in a major index. We would expect most companies to have some institutions on the register, especially if they are growing.

Changchun BCHT Biotechnology already has institutions on the share registry. Indeed, they own a respectable stake in the company. 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. 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 Changchun BCHT Biotechnology's historic earnings and revenue below, but keep in mind there's always more to the story.

Hedge funds don't have many shares in Changchun BCHT Biotechnology. Looking at our data, we can see that the largest shareholder is Changchun High-Tech Industry (Group) Co., Ltd. with 41% of shares outstanding. Wei Kong is the second largest shareholder owning 25% of common stock, and Xuening Wei holds about 5.1% of the company stock. Wei Kong, who is the second-largest shareholder, also happens to hold the title of Chief Executive Officer.

A more detailed study of the shareholder registry showed us that 2 of the top shareholders have a considerable amount of ownership in the company, via their 67% stake.

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 Changchun BCHT Biotechnology

The definition of an insider can differ slightly between different countries, but members of the board of directors always count. 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.

Most consider insider ownership a positive because it can indicate the board is well aligned with other shareholders. However, on some occasions too much power is concentrated within this group.

It seems insiders own a significant proportion of Changchun BCHT Biotechnology Co.. It has a market capitalization of just CN¥12b, and insiders have CN¥3.8b 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

The general public, who are usually individual investors, hold a 18% stake in Changchun BCHT Biotechnology. 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.

Public Company Ownership

We can see that public companies hold 41% of the Changchun BCHT Biotechnology shares on issue. We can't be certain but it is quite possible this is a strategic stake. The businesses may be similar, or work together.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand Changchun BCHT Biotechnology 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 Changchun BCHT Biotechnology , 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.

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.