Guangzhou Baiyunshan Pharmaceutical Holdings Company Limited (HKG:874) share price fell 8.0% last week; private companies would not be happy

If you want to know who actually controls Guangzhou Baiyunshan Pharmaceutical Holdings Company Limited (HKG:874), then you will need to look at the composition of its share register. And the group that holds the biggest slice of the pie are private companies with 53% ownership. In other words, the group is likely to gain the most (or lose the most) from its investment in the business.

As market capitalization fell to HK$54 billion last week, private companies would have suffered the highest losses than any other group of corporate shareholders.

Let’s dive deeper into each owner type of Guangzhou Baiyunshan Pharmaceutical Holdings, starting with the table below.

See our latest analysis for Guangzhou Baiyunshan Pharmaceutical Holdings

SEHK: 874 Breakdown of ownership as of January 31, 2022

What does institutional ownership tell us about Guangzhou Baiyunshan Pharmaceutical Holdings?

Institutional investors typically compare their own returns to the returns of a commonly tracked index. They therefore generally consider buying larger companies that are included in the relevant benchmark.

As you can see, institutional investors hold a sizeable share of Guangzhou Baiyunshan Pharmaceutical Holdings. This implies that analysts working for these institutions have reviewed the stock and like it. But like everyone else, they can be wrong. It is not uncommon to see a sharp decline in the stock price if two large institutional investors attempt to sell a stock at the same time. It is therefore worth checking the past earnings trajectory of Guangzhou Baiyunshan Pharmaceutical Holdings (below). Of course, keep in mind that there are other factors to consider as well.

earnings-and-revenue-growth
SEHK: 874 Profit and Revenue Growth as of Jan 31, 2022

Guangzhou Baiyunshan Pharmaceutical Holdings is not owned by hedge funds. Guangzhou Pharmaceutical Holdings Limited is currently the largest shareholder, with 45% of the outstanding shares. With 4.5% and 3.5% of outstanding shares respectively, Guangzhou China Life Insurance Urban Development Industry Investment Enterprises (LP) and Guangzhou Business Investment Holding Group Co.,Ltd. are the second and third shareholders.

After digging a little deeper, we found that the top 3 shareholders collectively control more than half of the company’s stock, implying that they have considerable power to influence company decisions.

While it makes sense to study data on a company’s institutional ownership, it also makes sense to study analyst sentiment to find out which way the wind is blowing. A number of analysts cover the stock, so you can look at growth forecasts quite easily.

Insider ownership of Guangzhou Baiyunshan Pharmaceutical Holdings

The definition of company insiders can be subjective and varies from jurisdiction to jurisdiction. Our data reflects individual insiders, capturing at least board members. Management is ultimately responsible to the board of directors. However, it is not uncommon for managers to be members of the management board, especially if they are founders or CEOs.

I generally consider insider ownership to be a good thing. However, there are times when it is more difficult for other shareholders to hold the board accountable for decisions.

Our data suggests that insiders hold less than 1% of Guangzhou Baiyunshan Pharmaceutical Holdings Company Limited in their own name. But they may have an indirect interest through a corporate structure that we have not noted. It’s a big company, so even a small proportionate interest can create alignment between the board and shareholders. In this case, the insiders hold HK$77,000 worth of shares. It’s good to see board members owning stock, but it can be helpful to check whether those insiders have bought.

General public property

The general public, including retail investors, owns 33% of the company’s shares and therefore cannot be easily ignored. This size of ownership, although considerable, may not be sufficient to change company policy if the decision is not in line with other large shareholders.

Private Company Ownership

It seems that private companies own 53% of the shares of Guangzhou Baiyunshan Pharmaceutical Holdings. It’s hard to draw conclusions from this fact alone, so it’s worth investigating who owns these private companies. Sometimes insiders or other related parties have an interest in shares of a public company through a separate private company.

Next steps:

I find it very interesting to see who exactly owns a company. But to really get insight, we also need to consider other information. Take risks for example – Guangzhou Baiyunshan Pharmaceutical Holdings has 1 warning sign we think you should know.

Ultimately the future is the most important. You can access this free analyst forecast report for the company.

NB: The figures in this article are calculated using trailing twelve month data, which refers to the 12 month period ending on the last day of the month in which the financial statements are dated. This may not be consistent with the annual report figures for the full year.

This Simply Wall St article is general in nature. We provide commentary based on historical data and analyst forecasts only using unbiased methodology and our articles are not intended to be financial advice. It is not a recommendation to buy or sell stocks and does not take into account your objectives or financial situation. Our goal is to bring you targeted long-term analysis based on fundamental data. Note that our analysis may not take into account the latest announcements from price-sensitive companies or qualitative materials. Simply Wall St has no position in the stocks mentioned.

Karen J. Nelson