Individual investors are Gushengtang Holdings Limited's (HKG:2273) biggest owners and were rewarded after market cap rose by HK$406m last week
Key Insights
- Gushengtang Holdings' significant individual investors ownership suggests that the key decisions are influenced by shareholders from the larger public
- 45% of the business is held by the top 25 shareholders
- Insiders own 10% of Gushengtang Holdings
If you want to know who really controls Gushengtang Holdings Limited (HKG:2273), then you'll have to look at the makeup of its share registry. We can see that individual investors own the lion's share in the company with 55% ownership. Put another way, the group faces the maximum upside potential (or downside risk).
As a result, individual investors collectively scored the highest last week as the company hit HK$6.8b market cap following a 6.4% gain in the stock.
In the chart below, we zoom in on the different ownership groups of Gushengtang Holdings.
View our latest analysis for Gushengtang Holdings
What Does The Institutional Ownership Tell Us About Gushengtang 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.
As you can see, institutional investors have a fair amount of stake in Gushengtang Holdings. 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. 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 Gushengtang Holdings' historic earnings and revenue below, but keep in mind there's always more to the story.
Gushengtang Holdings is not owned by hedge funds. Action Thrive Group Limited is currently the company's largest shareholder with 13% of shares outstanding. With 9.7% and 6.4% of the shares outstanding respectively, Zhiliang Tu and Ruiyuan Fund Management Company, LTD are the second and third largest shareholders. Zhiliang Tu, who is the second-largest shareholder, also happens to hold the title of Chief Executive Officer.
Our studies suggest that the top 25 shareholders collectively control less than half of the company's shares, meaning that the company's shares are widely disseminated and there is no dominant shareholder.
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. Quite a few analysts cover the stock, so you could look into forecast growth quite easily.
Insider Ownership Of Gushengtang Holdings
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. Company management run the business, but the CEO will answer to the board, even if he or she is a member of it.
Insider ownership is positive when it signals leadership are thinking like the true owners of the company. However, high insider ownership can also give immense power to a small group within the company. This can be negative in some circumstances.
Our information suggests that insiders maintain a significant holding in Gushengtang Holdings Limited. Insiders own HK$681m worth of shares in the HK$6.8b company. This may suggest that the founders still own a lot of shares. You can click here to see if they have been buying or selling.
General Public Ownership
The general public -- including retail investors -- own 55% of Gushengtang Holdings. This level of ownership gives investors from the wider public some power to sway key policy decisions such as board composition, executive compensation, and the dividend payout ratio.
Private Company Ownership
It seems that Private Companies own 18%, of the Gushengtang 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:
I find it very interesting to look at who exactly owns a company. But to truly gain insight, we need to consider other information, too.
I like to dive deeper into how a company has performed in the past. You can find historic revenue and earnings in this detailed graph.
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.