Key Insights

• The considerable ownership by individual investors in Zhejiang Garden BiopharmaceuticalLtd indicates that they collectively have a greater say in management and business strategy
• The top 25 shareholders own 48% of the company
• Institutional ownership in Zhejiang Garden BiopharmaceuticalLtd is 13%

To get a sense of who is truly in control of Zhejiang Garden Biopharmaceutical Co.,Ltd. (SZSE:300401), it is important to understand the ownership structure of the business. And the group that holds the biggest piece of the pie are individual investors with 51% ownership. Put another way, the group faces the maximum upside potential (or downside risk).

As a result, individual investors collectively scored the highest last week as the company hit CN¥6.3b market cap following a 6.6% gain in the stock.

In the chart below, we zoom in on the different ownership groups of Zhejiang Garden BiopharmaceuticalLtd.

What Does The Institutional Ownership Tell Us About Zhejiang Garden BiopharmaceuticalLtd?

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.

As you can see, institutional investors have a fair amount of stake in Zhejiang Garden BiopharmaceuticalLtd. This can indicate that the company has a certain degree of credibility in the investment community. However, it is best to be wary of relying on the supposed validation that comes with institutional investors. They too, get it wrong sometimes. If multiple institutions change their view on a stock at the same time, you could see the share price drop fast. It's therefore worth looking at Zhejiang Garden BiopharmaceuticalLtd's earnings history below. Of course, the future is what really matters.

Zhejiang Garden BiopharmaceuticalLtd is not owned by hedge funds. Zhejiang Xiangyun Technology Co., Ltd. is currently the company's largest shareholder with 27% of shares outstanding. In comparison, the second and third largest shareholders hold about 3.9% and 3.1% of the stock. Furthermore, CEO Huanzheng Ma is the owner of 0.7% of the company's shares.

A deeper look at our ownership data shows that the top 25 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. 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 Zhejiang Garden BiopharmaceuticalLtd

The definition of an insider can differ slightly between different countries, but members of the board of directors always count. The company management answer to the board and the latter should represent the interests of shareholders. Notably, sometimes top-level managers are on the board themselves.

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.

Shareholders would probably be interested to learn that insiders own shares in Zhejiang Garden Biopharmaceutical Co.,Ltd.. In their own names, insiders own CN¥373m worth of stock in the CN¥6.3b company. Some would say this shows alignment of interests between shareholders and the board. But it might be worth checking if those insiders have been selling.

General Public Ownership

The general public -- including retail investors -- own 51% of Zhejiang Garden BiopharmaceuticalLtd. This size of ownership gives investors from the general public some collective power. They can and probably do influence decisions on executive compensation, dividend policies and proposed business acquisitions.

Private Company Ownership

We can see that Private Companies own 28%, 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:

While it is well worth considering the different groups that own a company, there are other factors that are even more important. To that end, you should learn about the 2 warning signs we've spotted with Zhejiang Garden BiopharmaceuticalLtd (including 1 which is concerning) .

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.