The market capitalization of Sihuan Pharmaceutical Holdings Group Ltd. (HKG:460) fell HK$653 million last week; Private companies have paid the price

If you want to know who actually controls Sihuan Pharmaceutical Holdings Group Ltd. (HKG:460), you will then need to examine the composition of its share register. The group with the largest number of shares in the company, around 51% to be precise, are private companies. That is, the group will benefit the most if the stock goes up (or lose the most if there is a downturn).

As a result, private companies as a group suffered the highest losses last week after the market capitalization plummeted by HK$653 million.

In the table below, we zoom in on the different ownership groups of Sihuan Pharmaceutical Holdings Group.

Check out our latest analysis for Sihuan Pharmaceutical Holdings Group

SEHK: 460 Ownership Breakdown April 18, 2022

What does institutional ownership tell us about the Sihuan Pharmaceutical Holdings group?

Institutions typically measure themselves against a benchmark when reporting to their own investors, so they often become more enthusiastic about a stock once it is included in a major index. We would expect most companies to have some institutions listed, especially if they are growing.

Less than 5% of Sihuan Pharmaceutical Holdings Group is owned by institutional investors. This suggests that some funds have the company in their sights, but many have yet to buy shares. If the company strengthens from here, we could see a situation where more institutions are eager to buy. When several institutional investors wish to buy shares, we often see a rise in the price of the share. Past revenue trajectory (shown below) can be an indication of future growth, but there are no guarantees.

earnings-and-revenue-growth
SEHK: 460 Profit and Revenue Growth April 18, 2022

Hedge funds do not have many shares in Sihuan Pharmaceutical Holdings Group. Proper Process International Limited is currently the largest shareholder, with 31% of the outstanding shares. Successmax Global Limited is the second largest shareholder with 14% of the common shares and Fengsheng Che owns about 5.3% of the shares of the company. Fengsheng Che, who is the third largest shareholder, also holds the title of chairman of the board. Additionally, we found that Weicheng Guo, the CEO, owns 3.5% of the shares allocated to his name.

Looking further, we found that 54% of the shares are held by the top 4 shareholders. In other words, these shareholders have a say in the decisions of the company.

Institutional ownership research is a good way to assess and filter the expected performance of a stock. The same can be obtained by studying the feelings of the analyst. A number of analysts cover the stock, so you can look at growth forecasts quite easily.

Insider ownership of Sihuan Pharmaceutical Holdings Group

The definition of company insiders can be subjective and varies from jurisdiction to jurisdiction. Our data reflects individual insiders, capturing at least board members. The management of the company runs the company, but the CEO will answer to the board of directors, even if he is a member of it.

Most view insider ownership as a positive because it can indicate that the board is well aligned with other shareholders. However, there are times when too much power is concentrated within this group.

It appears that insiders hold a large share of Sihuan Pharmaceutical Holdings Group Ltd. It has a market capitalization of just HK$13 billion, and insiders hold HK$1.7 billion of shares in their own name. It is quite significant. Good to see this level of investment. You can check here if these insiders have bought recently.

General public property

The general public, who are usually individual investors, hold a 31% stake in Sihuan Pharmaceutical Holdings Group. 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 appears that private companies hold 51% of the shares of Sihuan Pharmaceutical Holdings group. It might be worth exploring this further. If related parties, such as insiders, have an interest in any of these private companies, this must be disclosed in the annual report. Private companies may also have a strategic interest in the company.

Next steps:

It is always useful to think about the different groups that own shares in a company. But to better understand Sihuan Pharmaceutical Holdings Group, we need to consider many other factors. Take for example the ubiquitous specter of investment risk. We have identified 3 warning signs with Sihuan Pharmaceutical Holdings Group, and understanding them should be part of your investment process.

If you prefer to find out what analysts are predicting in terms of future growth, don’t miss this free analyst forecast report.

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.