Genetron Holdings Limited (NASDAQ:GTH) stock price fell 14% last week; individual investors would not be happy

If you want to know who actually controls Genetron Holdings Limited (NASDAQ:GTH), then you’ll need to look at the composition of its share register. We can see that individual investors hold the lion’s share of the company with 32% ownership. In other words, the group is likely to gain the most (or lose the most) from its investment in the business.

While insiders, who own 26% of the shares, were not spared by the market capitalization drop of US$21 million last week, individual investors as a group suffered the maximum losses.

In the table below, we zoom in on the different ownership groups of Genetron Holdings.

See our latest analysis for Genetron Holdings

NasdaqGM: GTH Ownership Breakdown July 12, 2022

What does institutional ownership tell us about Genetron Holdings?

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 Genetron Holdings has institutional investors; and they own a good part of the shares of the company. This implies that analysts working for these institutions have reviewed the stock and like it. But like everyone else, they can be wrong. When multiple institutions hold a stock, there is always a risk that they are in a “crowded trade”. When such a transaction goes wrong, multiple parties may compete to quickly sell shares. This risk is higher in a company with no history of growth. You can see Genetron Holdings’ historical earnings and revenue below, but keep in mind there’s always more to tell.

earnings-and-revenue-growth
NasdaqGM: GTH Earnings and Revenue Growth July 12, 2022

Genetron Holdings is not owned by hedge funds. CICC Capital Management Co., Ltd. is currently the largest shareholder, with 13% of the outstanding shares. Vivo Capital, LLC is the second largest shareholder with 8.2% of the common stock and Hai Yan owns approximately 7.3% of the company’s stock. Hai Yan, who is the third shareholder, also holds the title of member of the board of directors. Additionally, CEO Sizhen Wang owns 6.9% of the company’s shares.

We dug a little deeper and found that 7 of the major shareholders make up about 51% of the register, implying that along with the large shareholders, there are a few smaller shareholders, thereby balancing everyone’s interests somewhat.

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. Although there is some analyst coverage, the company is probably not widely covered. So it could attract more attention, on the track.

Insider ownership of Genetron Holdings

The definition of an insider may differ slightly from country to country, but board members still matter. Management is ultimately responsible to the board of directors. However, it is not uncommon for managers to be members of the management board, especially if they are founders or CEOs.

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.

Our most recent data indicates that insiders own a reasonable proportion of Genetron Holdings Limited. Insiders hold a $34 million stake in this $131 million company. It’s great to see insiders so invested in the company. It might be worth checking to see if these insiders have bought recently.

General public property

The general public, including retail investors, owns 32% of the company’s shares and therefore cannot be easily ignored. Although this group may not necessarily make the decisions, they can certainly have a real influence on the way the business is run.

Private equity ownership

With a 21% stake, private equity firms could sway Genetron Holdings’ board. This might appeal to some, because private equity is sometimes an activist who holds management accountable. But other times, the private equity sells off, after taking the company public.

Private Company Ownership

Our data indicates that private companies own 8.1% of the company’s shares. It’s hard to draw conclusions from this fact alone, so it’s worth investigating who owns these private companies. Sometimes insiders or other related parties have an interest in shares of a public company through a separate private company.

Next steps:

It is always useful to think about the different groups that own shares in a company. But to better understand Genetron Holdings, we need to consider many other factors. Be aware that Genetron Holdings displays 2 warning signs in our investment analysis you should know…

But finally it’s the future, not the past, which will determine the performance of the owners of this company. Therefore, we think it’s advisable to take a look at this free report showing whether analysts are predicting a brighter future.

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.

Karen J. Nelson