If you want to know who really controls Beijing Chunlizhengda Medical Instruments Co., Ltd. (HKG:1858), then you’ll have to look at the makeup of its share registry. Institutions often own shares in more established companies, while it’s not unusual to see insiders own a fair bit of smaller companies. I quite like to see at least a little bit of insider ownership. As Charlie Munger said ‘Show me the incentive and I will show you the outcome.
Beijing Chunlizhengda Medical Instruments isn’t enormous, but it’s not particularly small either. It has a market capitalization of HK$7.4b, which means it would generally expect to see some institutions on the share registry. Our analysis of the ownership of the company, below, shows that institutions are noticeable on the share registry. Let’s delve deeper into each type of owner, to discover more about Beijing Chunlizhengda Medical Instruments.
What Does The Institutional Ownership Tell Us About Beijing Chunlizhengda Medical Instruments?
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 Beijing Chunlizhengda Medical Instruments 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 Beijing Chunlizhengda Medical Instruments’ earnings history below. Of course, the future is what really matters.
Hedge funds don’t have many shares in Beijing Chunlizhengda Medical Instruments. The company’s CEO Chunbao Shi is the largest shareholder with 33% of shares outstanding. With 28% and 5.0% of the shares outstanding respectively, Shujun Yue and Beijing Panmao Investment Management Co., Ltd. are the second and third largest shareholders. Interestingly, the second-largest shareholder, Shujun Yue is also Senior Key Executive, again, pointing towards strong insider ownership amongst the company’s top shareholders.
After doing some more digging, we found that the top 2 shareholders collectively control more than half of the company’s shares, implying that they have considerable power to influence the company’s decisions.
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. 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 Beijing Chunlizhengda Medical Instruments
While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. Management ultimately answers to the board. However, it is not uncommon for managers to be executive board members, especially if they are a founder or the CEO.
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 that insiders own more than half the Beijing Chunlizhengda Medical Instruments Co., Ltd. stock. This gives them a lot of power. So they have a HK$5.0b stake in this HK$7.4b 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 holds a 16% stake in Beijing Chunlizhengda Medical Instruments. While this group can’t necessarily call the shots, it can certainly have a real influence on how the company is run.
While it is well worth considering the different groups that own a company, there are other factors that are even more important. Take risks for example – Beijing Chunlizhengda Medical Instruments has 2 warning signs (and 1 which is significant) we think you should know about.
But ultimately it is the future, not the past, that will determine how well the owners of this business will do. Therefore we think it advisable to take a look at this free report showing whether analysts are predicting a brighter future.
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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