Key Insights

• Given the large stake in the stock by institutions, ImmuneOnco Biopharmaceuticals (Shanghai)'s stock price might be vulnerable to their trading decisions
• 52% of the business is held by the top 5 shareholders
• Insider ownership in ImmuneOnco Biopharmaceuticals (Shanghai) is 19%

To get a sense of who is truly in control of ImmuneOnco Biopharmaceuticals (Shanghai) Inc. (HKG:1541), it is important to understand the ownership structure of the business. With 26% stake, institutions possess the maximum shares in the company. Put another way, the group faces the maximum upside potential (or downside risk).

Unfortunately, institutional ended up on the other end of the spectrum as market cap fell by HK$2.4b.

Let's take a closer look to see what the different types of shareholders can tell us about ImmuneOnco Biopharmaceuticals (Shanghai).

What Does The Institutional Ownership Tell Us About ImmuneOnco Biopharmaceuticals (Shanghai)?

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 ImmuneOnco Biopharmaceuticals (Shanghai) 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 ImmuneOnco Biopharmaceuticals (Shanghai)'s historic earnings and revenue below, but keep in mind there's always more to the story.

We note that hedge funds don't have a meaningful investment in ImmuneOnco Biopharmaceuticals (Shanghai). Looking at our data, we can see that the largest shareholder is the CEO Tian Wenzhi with 19% of shares outstanding. For context, the second largest shareholder holds about 13% of the shares outstanding, followed by an ownership of 11% by the third-largest shareholder.

Our research also brought to light the fact that roughly 52% of the company is controlled by the top 5 shareholders suggesting that these owners wield significant influence on the business.

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. While there is some analyst coverage, the company is probably not widely covered. So it could gain more attention, down the track.

Insider Ownership Of ImmuneOnco Biopharmaceuticals (Shanghai)

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

Our most recent data indicates that insiders own a reasonable proportion of ImmuneOnco Biopharmaceuticals (Shanghai) Inc.. Insiders have a HK$1.3b stake in this HK$7.0b business. 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

The general public-- including retail investors -- own 25% stake in the company, and hence can't easily be ignored. 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 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. Sometimes we see private equity stick around for the long term, but generally speaking they have a shorter investment horizon and -- as the name suggests -- don't invest in public companies much. After some time they may look to sell and redeploy capital elsewhere.

Next Steps:

While it is well worth considering the different groups that own a company, there are other factors that are even more important. Consider for instance, the ever-present spectre of investment risk. We've identified 3 warning signs with ImmuneOnco Biopharmaceuticals (Shanghai) (at least 2 which are significant) , 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.

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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.