Clover Biopharmaceuticals, Ltd.'s (HKG:2197) market cap rose HK$311m last week; retail investors who hold 53% profited and so did insiders

Key Insights

• Significant control over Clover Biopharmaceuticals by retail investors implies that the general public has more power to influence management and governance-related decisions
• The top 15 shareholders own 47% of the company
• Insiders have bought recently

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To get a sense of who is truly in control of Clover Biopharmaceuticals, Ltd. (HKG:2197), it is important to understand the ownership structure of the business. The group holding the most number of shares in the company, around 53% 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.

Retail investors gained the most after market cap touched HK$3.3b last week, while insiders who own 20% also benefitted.

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

See our latest analysis for Clover Biopharmaceuticals

What Does The Institutional Ownership Tell Us About Clover Biopharmaceuticals?

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 Clover Biopharmaceuticals does have institutional investors; and they hold a good portion of the company's stock. 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. It is not uncommon to see a big share price drop if two large institutional investors try to sell out of a stock at the same time. So it is worth checking the past earnings trajectory of Clover Biopharmaceuticals, (below). Of course, keep in mind that there are other factors to consider, too.

We note that hedge funds don't have a meaningful investment in Clover Biopharmaceuticals. From our data, we infer that the largest shareholder is Peng Liang (who also holds the title of Top Key Executive) with 16% of shares outstanding. Its usually considered a good sign when insiders own a significant number of shares in the company, and in this case, we're glad to see a company insider play the role of a key stakeholder. Hillhouse Investment Management, Ltd. is the second largest shareholder owning 12% of common stock, and Chengdu Tianhe Conventional Chinese and Medicine Technology Nurture Co. Ltd holds about 5.4% of the company stock. Additionally, the company's CEO Joshua G. Liang directly holds 1.7% of the total shares outstanding.

A deeper look at our ownership data shows that the top 15 shareholders collectively hold less than half of the register, suggesting a large group of small holders where no single shareholder has a majority.

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. Our information suggests that there isn't any analyst coverage of the stock, so it is probably little known.

Insider Ownership Of Clover Biopharmaceuticals

The definition of an insider can differ slightly between different countries, but members of the board of directors always count. 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.

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 information suggests that insiders maintain a significant holding in Clover Biopharmaceuticals, Ltd.. Insiders own HK$666m worth of shares in the HK$3.3b company. It is great to see insiders so invested in the business. It might be worth checking if those insiders have been buying recently.

General Public Ownership

The general public -- including retail investors -- own 53% of Clover Biopharmaceuticals. 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 Equity Ownership

With a stake of 12%, private equity firms could influence the Clover Biopharmaceuticals board. Some investors might be encouraged by this, since private equity are sometimes able to encourage strategies that help the market see the value in the company. Alternatively, those holders might be exiting the investment after taking it public.

Private Company Ownership

We can see that Private Companies own 5.4%, of the shares on issue. 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:

It's always worth thinking about the different groups who own shares in a company. But to understand Clover Biopharmaceuticals better, we need to consider many other factors. For instance, we've identified 2 warning signs for Clover Biopharmaceuticals (1 is a bit concerning) that you should be aware of.

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.

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.