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While Institutions Invested in Peijia Medical Limited (HKG:9996) Benefited From Last Week's 11% Gain, Retail Investors Stood to Gain the Most

Simply Wall St ·  Jul 13, 2023 22:47

Key Insights

  • Peijia Medical's significant retail investors ownership suggests that the key decisions are influenced by shareholders from the larger public
  • The top 8 shareholders own 50% of the company
  • Recent sales by insiders

A look at the shareholders of Peijia Medical Limited (HKG:9996) can tell us which group is most powerful. With 38% stake, retail investors possess the maximum shares in the company. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

While retail investors were the group that reaped the most benefits after last week's 11% price gain, institutions also received a 25% cut.

Let's take a closer look to see what the different types of shareholders can tell us about Peijia Medical.

Check out our latest analysis for Peijia Medical

ownership-breakdown
SEHK:9996 Ownership Breakdown July 14th 2023

What Does The Institutional Ownership Tell Us About Peijia Medical?

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.

Peijia Medical 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. If multiple institutions change their view on a stock at the same time, you could see the share price drop fast. It's therefore worth looking at Peijia Medical's earnings history below. Of course, the future is what really matters.

earnings-and-revenue-growth
SEHK:9996 Earnings and Revenue Growth July 14th 2023

Peijia Medical is not owned by hedge funds. XinYue International Limited is currently the company's largest shareholder with 13% of shares outstanding. Lav Advanced Management Company Limited is the second largest shareholder owning 9.5% of common stock, and Fidelity International Ltd holds about 8.9% of the company stock. Furthermore, CEO Yi Zhang is the owner of 0.8% of the company's shares.

We also observed that the top 8 shareholders account for more than half of the share register, with a few smaller shareholders to balance the interests of the larger ones to a certain extent.

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 Peijia Medical

The definition of company insiders can be subjective and does vary between jurisdictions. Our data reflects individual insiders, capturing board members at the very least. The company management answer to the board and the latter should represent the interests of shareholders. Notably, sometimes top-level managers are on the board themselves.

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.

We can report that insiders do own shares in Peijia Medical Limited. In their own names, insiders own HK$162m worth of stock in the HK$5.3b company. This shows at least some alignment. You can click here to see if those insiders have been buying or selling.

General Public Ownership

The general public, who are usually individual investors, hold a 38% stake in Peijia Medical. 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.

Private Equity Ownership

With an ownership of 16%, private equity firms are in a position to play a role in shaping corporate strategy with a focus on value creation. Some investors might be encouraged by this, since private equity are sometimes able to encourage strategies that help the market see the value in the company. Alternatively, those holders might be exiting the investment after taking it public.

Private Company Ownership

We can see that Private Companies own 18%, of the shares on issue. It might be worth looking deeper into this. If related parties, such as insiders, have an interest in one of these private companies, that should be disclosed in the annual report. Private companies may also have a strategic interest in the company.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand Peijia Medical better, we need to consider many other factors. To that end, you should be aware of the 1 warning sign we've spotted with Peijia Medical .

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.

Disclaimer: This content is for informational and educational purposes only and does not constitute a recommendation or endorsement of any specific investment or investment strategy. Read more
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