Key Insights

• Significant control over BrightGene Bio-Medical Technology by retail investors implies that the general public has more power to influence management and governance-related decisions
• 51% of the business is held by the top 7 shareholders
• 32% of BrightGene Bio-Medical Technology is held by insiders

A look at the shareholders of BrightGene Bio-Medical Technology Co., Ltd. (SHSE:688166) can tell us which group is most powerful. The group holding the most number of shares in the company, around 34% to be precise, is retail investors. Put another way, the group faces the maximum upside potential (or downside risk).

While retail investors were the group that benefitted the most from last week's CN¥613m market cap gain, insiders too had a 32% share in those profits.

In the chart below, we zoom in on the different ownership groups of BrightGene Bio-Medical Technology.

What Does The Institutional Ownership Tell Us About BrightGene Bio-Medical Technology?

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.

BrightGene Bio-Medical Technology already has institutions on the share registry. Indeed, they own a respectable stake in the company. 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 BrightGene Bio-Medical Technology's historic earnings and revenue below, but keep in mind there's always more to the story.

BrightGene Bio-Medical Technology is not owned by hedge funds. The company's CEO Jiandong Yuan is the largest shareholder with 32% of shares outstanding. For context, the second largest shareholder holds about 6.3% of the shares outstanding, followed by an ownership of 4.4% by the third-largest shareholder.

We also observed that the top 7 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 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. We're not picking up on any analyst coverage of the stock at the moment, so the company is unlikely to be widely held.

Insider Ownership Of BrightGene Bio-Medical Technology

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 BrightGene Bio-Medical Technology Co., Ltd.. It has a market capitalization of just CN¥11b, and insiders have CN¥3.6b worth of shares in their own names. That's quite significant. 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

With a 34% ownership, the general public, mostly comprising of individual investors, have some degree of sway over BrightGene Bio-Medical Technology. While this size of ownership may not be enough to sway a policy decision in their favour, they can still make a collective impact on company policies.

Private Company Ownership

We can see that Private Companies own 6.3%, 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 BrightGene Bio-Medical Technology better, we need to consider many other factors. For instance, we've identified 1 warning sign for BrightGene Bio-Medical Technology that you should be aware of.

If you would prefer check out another company -- one with potentially superior financials -- then do not miss this free list of interesting companies, backed by strong financial data.

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.