Key Insights

• The considerable ownership by individual investors in Shanghai Shenqi Pharmaceutical Investment Management indicates that they collectively have a greater say in management and business strategy
• The top 4 shareholders own 51% of the company
• Insider ownership in Shanghai Shenqi Pharmaceutical Investment Management is 13%

If you want to know who really controls Shanghai Shenqi Pharmaceutical Investment Management Co., Ltd. (SHSE:900904), then you'll have to look at the makeup of its share registry. With 46% stake, individual investors possess the maximum shares in the company. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

And last week, individual investors endured the biggest losses as the stock fell by 14%.

In the chart below, we zoom in on the different ownership groups of Shanghai Shenqi Pharmaceutical Investment Management.

See our latest analysis for Shanghai Shenqi Pharmaceutical Investment Management

What Does The Institutional Ownership Tell Us About Shanghai Shenqi Pharmaceutical Investment Management?

Institutional investors commonly compare their own returns to the returns of a commonly followed index. So they generally do consider buying larger companies that are included in the relevant benchmark index.

Less than 5% of Shanghai Shenqi Pharmaceutical Investment Management is held by institutional investors. This suggests that some funds have the company in their sights, but many have not yet bought shares in it. If the company is growing earnings, that may indicate that it is just beginning to catch the attention of these deep-pocketed investors. When multiple institutional investors want to buy shares, we often see a rising share price. The past revenue trajectory (shown below) can be an indication of future growth, but there are no guarantees.

Shanghai Shenqi Pharmaceutical Investment Management is not owned by hedge funds. Looking at our data, we can see that the largest shareholder is Guizhou Shenqi Holdings (Group) Co., Ltd. with 23% of shares outstanding. In comparison, the second and third largest shareholders hold about 16% and 9.5% of the stock. Zhiting Zhang, who is the third-largest shareholder, also happens to hold the title of Chairman of the Board.

Our research also brought to light the fact that roughly 51% of the company is controlled by the top 4 shareholders suggesting that these owners wield significant influence on the business.

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

Insider Ownership Of Shanghai Shenqi Pharmaceutical Investment Management

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. 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.

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.

It seems insiders own a significant proportion of Shanghai Shenqi Pharmaceutical Investment Management Co., Ltd.. Insiders have a US$78m stake in this US$580m business. This may suggest that the founders still own a lot of shares. You can click here to see if they have been buying or selling.

General Public Ownership

With a 46% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Shanghai Shenqi Pharmaceutical Investment Management. This size of ownership, while considerable, may not be enough to change company policy if the decision is not in sync with other large shareholders.

Private Company Ownership

It seems that Private Companies own 39%, of the Shanghai Shenqi Pharmaceutical Investment Management stock. It might be worth looking deeper into this. If related parties, such as insiders, have an interest in one of these private companies, that should be disclosed in the annual report. Private companies may also have a strategic interest in the company.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand Shanghai Shenqi Pharmaceutical Investment Management better, we need to consider many other factors. For instance, we've identified 3 warning signs for Shanghai Shenqi Pharmaceutical Investment Management (1 makes us a bit uncomfortable) that you should be aware of.

Of course this may not be the best stock to buy. Therefore, you may wish to see our free collection of interesting prospects boasting favorable financials.

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.