Key Insights

• Significant insider control over Jiangsu Aidea Pharmaceutical implies vested interests in company growth
• 50% of the business is held by the top 4 shareholders
• 19% of Jiangsu Aidea Pharmaceutical is held by Institutions

A look at the shareholders of Jiangsu Aidea Pharmaceutical Co., Ltd. (SHSE:688488) can tell us which group is most powerful. And the group that holds the biggest piece of the pie are individual insiders with 28% ownership. Put another way, the group faces the maximum upside potential (or downside risk).

As market cap fell to CN¥3.7b last week, insiders would have faced the highest losses than any other shareholder groups of the company.

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

What Does The Institutional Ownership Tell Us About Jiangsu Aidea Pharmaceutical?

Institutions typically measure themselves against a benchmark when reporting to their own investors, so they often become more enthusiastic about a stock once it's included in a major index. We would expect most companies to have some institutions on the register, especially if they are growing.

Jiangsu Aidea Pharmaceutical already has institutions on the share registry. Indeed, they own a respectable stake in the company. 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 Jiangsu Aidea Pharmaceutical's earnings history below. Of course, the future is what really matters.

Jiangsu Aidea Pharmaceutical is not owned by hedge funds. Guangzhou Weimei Investment Co., Ltd. is currently the largest shareholder, with 22% of shares outstanding. In comparison, the second and third largest shareholders hold about 22% and 3.2% of the stock. Furthermore, CEO Heliang Fu is the owner of 0.7% of the company's shares.

On looking further, we found that 50% of the shares are owned by the top 4 shareholders. In other words, these shareholders have a meaningful say in the decisions of the company.

Researching institutional ownership is a good way to gauge and filter a stock's expected performance. The same can be achieved by studying analyst sentiments. There is some analyst coverage of the stock, but it could still become more well known, with time.

Insider Ownership Of Jiangsu Aidea Pharmaceutical

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. Company management run the business, but the CEO will answer to the board, even if he or she is a member of it.

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.

Our most recent data indicates that insiders own a reasonable proportion of Jiangsu Aidea Pharmaceutical Co., Ltd.. Insiders have a CN¥1.0b stake in this CN¥3.7b business. 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, who are usually individual investors, hold a 26% stake in Jiangsu Aidea Pharmaceutical. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.

Private Company Ownership

We can see that Private Companies own 27%, of the shares on issue. Private companies may be related parties. Sometimes insiders have an interest in a public company through a holding in a private company, rather than in their own capacity as an individual. While it's hard to draw any broad stroke conclusions, it is worth noting as an area for further research.

Next Steps:

I find it very interesting to look at who exactly owns a company. But to truly gain insight, we need to consider other information, too. Like risks, for instance. Every company has them, and we've spotted 2 warning signs for Jiangsu Aidea Pharmaceutical (of which 1 is a bit concerning!) you should know about.

If you would prefer discover what analysts are predicting in terms of future growth, do not miss this free report on analyst forecasts.

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com