KPC Pharmaceuticals,Inc's (SHSE:600422) Biggest Owners Are Retail Investors Who Got Richer After Stock Soared 4.5% Last Week

Simply Wall St ·  Dec 8, 2023 09:10

Key Insights

  • Significant control over KPC PharmaceuticalsInc by retail investors implies that the general public has more power to influence management and governance-related decisions
  • The top 8 shareholders own 51% of the company
  • Institutions own 23% of KPC PharmaceuticalsInc

A look at the shareholders of KPC Pharmaceuticals,Inc (SHSE:600422) can tell us which group is most powerful. The group holding the most number of shares in the company, around 39% to be precise, is retail investors. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

Clearly, retail investors benefitted the most after the company's market cap rose by CN¥713m last week.

Let's take a closer look to see what the different types of shareholders can tell us about KPC PharmaceuticalsInc.

View our latest analysis for KPC PharmaceuticalsInc

SHSE:600422 Ownership Breakdown December 8th 2023

What Does The Institutional Ownership Tell Us About KPC PharmaceuticalsInc?

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

As you can see, institutional investors have a fair amount of stake in KPC PharmaceuticalsInc. This suggests some credibility amongst professional investors. But we can't rely on that fact alone since institutions make bad investments sometimes, just like everyone does. 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 KPC PharmaceuticalsInc's historic earnings and revenue below, but keep in mind there's always more to the story.

SHSE:600422 Earnings and Revenue Growth December 8th 2023

We note that hedge funds don't have a meaningful investment in KPC PharmaceuticalsInc. China Resources Company Limited is currently the company's largest shareholder with 28% of shares outstanding. Meanwhile, the second and third largest shareholders, hold 7.9% and 3.5%, of the shares outstanding, respectively.

We also observed that the top 8 shareholders account for more than half of the share register, with a few smaller shareholders to balance the interests of the larger ones to a certain extent.

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. There are plenty of analysts covering the stock, so it might be worth seeing what they are forecasting, too.

Insider Ownership Of KPC PharmaceuticalsInc

The definition of an insider can differ slightly between different countries, but members of the board of directors always count. Company management run the business, but the CEO will answer to the board, even if he or she is a member of it.

Most consider insider ownership a positive because it can indicate the board is well aligned with other shareholders. However, on some occasions too much power is concentrated within this group.

Our data suggests that insiders own under 1% of KPC Pharmaceuticals,Inc in their own names. But they may have an indirect interest through a corporate structure that we haven't picked up on. Keep in mind that it's a big company, and the insiders own CN¥65m worth of shares. The absolute value might be more important than the proportional share. It is always good to see at least some insider ownership, but it might be worth checking if those insiders have been selling.

General Public Ownership

The general public-- including retail investors -- own 39% stake in the company, and hence can't easily be ignored. 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 37%, of the shares on issue. Private companies may be related parties. Sometimes insiders have an interest in a public company through a holding in a private company, rather than in their own capacity as an individual. While it's hard to draw any broad stroke conclusions, it is worth noting as an area for further research.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand KPC PharmaceuticalsInc better, we need to consider many other factors. Case in point: We've spotted 2 warning signs for KPC PharmaceuticalsInc you should be aware of.

If you are like me, you may want to think about whether this company will grow or shrink. Luckily, you can check this free report showing analyst forecasts for its 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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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.

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