Key Insights

• Insiders appear to have a vested interest in Harbin Medisan Pharmaceutical's growth, as seen by their sizeable ownership
• A total of 2 investors have a majority stake in the company with 54% ownership
• Ownership research, combined with past performance data can help provide a good understanding of opportunities in a stock

Every investor in Harbin Medisan Pharmaceutical Co., Ltd. (SZSE:002900) should be aware of the most powerful shareholder groups. We can see that individual insiders own the lion's share in the company with 64% ownership. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

And following last week's 13% decline in share price, insiders suffered the most losses.

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

What Does The Institutional Ownership Tell Us About Harbin Medisan Pharmaceutical?

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.

Institutions have a very small stake in Harbin Medisan Pharmaceutical. That indicates that the company is on the radar of some funds, but it isn't particularly popular with professional investors at the moment. 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.

Hedge funds don't have many shares in Harbin Medisan Pharmaceutical. With a 42% stake, CEO Jian Fei Qin is the largest shareholder. In comparison, the second and third largest shareholders hold about 12% and 8.7% of the stock. Interestingly, the third-largest shareholder, Guomin Zhuge is also a Vice Chairman, again, indicating strong insider ownership amongst the company's top shareholders.

To make our study more interesting, we found that the top 2 shareholders have a majority ownership in the company, meaning that they are powerful enough to influence the decisions of the company.

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 Harbin Medisan Pharmaceutical

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.

I generally consider insider ownership to be a good thing. However, on some occasions it makes it more difficult for other shareholders to hold the board accountable for decisions.

Our most recent data indicates that insiders own the majority of Harbin Medisan Pharmaceutical Co., Ltd.. This means they can collectively make decisions for the company. That means they own CN¥1.8b worth of shares in the CN¥2.8b company. That's quite meaningful. 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

The general public-- including retail investors -- own 29% stake in the company, and hence can't easily be ignored. 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 4.0%, of the Harbin Medisan Pharmaceutical stock. 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 Harbin Medisan Pharmaceutical better, we need to consider many other factors. Like risks, for instance. Every company has them, and we've spotted 4 warning signs for Harbin Medisan Pharmaceutical (of which 3 are significant!) you should know about.

Of course this may not be the best stock to buy. So take a peek at this free 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.