Key Insights

• Guangzhou Baiyunshan Pharmaceutical Holdings' significant private companies ownership suggests that the key decisions are influenced by shareholders from the larger public
• 53% of the business is held by the top 3 shareholders
• Institutional ownership in Guangzhou Baiyunshan Pharmaceutical Holdings is 20%

If you want to know who really controls Guangzhou Baiyunshan Pharmaceutical Holdings Company Limited (HKG:874), then you'll have to look at the makeup of its share registry. The group holding the most number of shares in the company, around 46% to be precise, is private companies. Put another way, the group faces the maximum upside potential (or downside risk).

Clearly, private companies benefitted the most after the company's market cap rose by HK$1.3b last week.

Let's take a closer look to see what the different types of shareholders can tell us about Guangzhou Baiyunshan Pharmaceutical Holdings.

What Does The Institutional Ownership Tell Us About Guangzhou Baiyunshan Pharmaceutical Holdings?

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 Guangzhou Baiyunshan Pharmaceutical Holdings 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. 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 Guangzhou Baiyunshan Pharmaceutical Holdings' historic earnings and revenue below, but keep in mind there's always more to the story.

Guangzhou Baiyunshan Pharmaceutical Holdings is not owned by hedge funds. The company's largest shareholder is Guangzhou Pharmaceutical Holdings Limited, with ownership of 45%. Meanwhile, the second and third largest shareholders, hold 4.5% and 3.7%, of the shares outstanding, respectively.

A more detailed study of the shareholder registry showed us that 3 of the top shareholders have a considerable amount of ownership in the company, via their 53% stake.

While studying institutional ownership for a company can add value to your research, it is also a good practice to research analyst recommendations to get a deeper understand of a stock's expected performance. Quite a few analysts cover the stock, so you could look into forecast growth quite easily.

Insider Ownership Of Guangzhou Baiyunshan Pharmaceutical Holdings

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.

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.

Our information suggests that Guangzhou Baiyunshan Pharmaceutical Holdings Company Limited insiders own under 1% of the company. We do note, however, it is possible insiders have an indirect interest through a private company or other corporate structure. It's a big company, so even a small proportional interest can create alignment between the board and shareholders. In this case insiders own HK$77k worth of shares. It is good to see board members owning shares, but it might be worth checking if those insiders have been buying.

General Public Ownership

The general public, who are usually individual investors, hold a 34% stake in Guangzhou Baiyunshan Pharmaceutical Holdings. 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

It seems that Private Companies own 46%, of the Guangzhou Baiyunshan Pharmaceutical Holdings stock. 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 Guangzhou Baiyunshan Pharmaceutical Holdings better, we need to consider many other factors. To that end, you should be aware of the 1 warning sign we've spotted with Guangzhou Baiyunshan Pharmaceutical Holdings .

If you would prefer discover what analysts are predicting in terms of future growth, do not miss this free report on analyst forecasts.

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.