Key Insights

• Significant control over Hualan Biological Engineering by retail investors implies that the general public has more power to influence management and governance-related decisions
• The top 5 shareholders own 51% of the company
• 18% of Hualan Biological Engineering is held by insiders

Every investor in Hualan Biological Engineering Inc. (SZSE:002007) should be aware of the most powerful shareholder groups. The group holding the most number of shares in the company, around 38% to be precise, is retail investors. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

Meanwhile, private companies make up 29% of the company's shareholders.

In the chart below, we zoom in on the different ownership groups of Hualan Biological Engineering.

What Does The Institutional Ownership Tell Us About Hualan Biological Engineering?

Many institutions measure their performance against an index that approximates the local market. So they usually pay more attention to companies that are included in major indices.

We can see that Hualan Biological Engineering does have institutional investors; and they hold a good portion of the company's stock. This implies the analysts working for those institutions have looked at the stock and they like it. But just like anyone else, they could be wrong. 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 Hualan Biological Engineering's earnings history below. Of course, the future is what really matters.

Hualan Biological Engineering is not owned by hedge funds. Our data shows that Kang An is the largest shareholder with 18% of shares outstanding. With 15% and 13% of the shares outstanding respectively, Chongqing Chengkang Biotechnology Development Co., Ltd. and Hong Kong Kekang Co., Ltd. are the second and third largest shareholders.

Our research also brought to light the fact that roughly 51% of the company is controlled by the top 5 shareholders suggesting that these owners wield significant influence on the business.

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 Hualan Biological Engineering

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.

I generally consider insider ownership to be a good thing. However, on some occasions it makes it more difficult for other shareholders to hold the board accountable for decisions.

It seems insiders own a significant proportion of Hualan Biological Engineering Inc.. It is very interesting to see that insiders have a meaningful CN¥6.5b stake in this CN¥36b business. It is good to see this level of investment. You can check here to see if those insiders have been buying recently.

General Public Ownership

The general public, who are usually individual investors, hold a 38% stake in Hualan Biological Engineering. 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 29%, 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:

It's always worth thinking about the different groups who own shares in a company. But to understand Hualan Biological Engineering better, we need to consider many other factors. Consider risks, for instance. Every company has them, and we've spotted 1 warning sign for Hualan Biological Engineering you should know about.

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.