Key Insights

• Significant control over Jiangsu Nhwa Pharmaceutical by retail investors implies that the general public has more power to influence management and governance-related decisions
• A total of 6 investors have a majority stake in the company with 51% ownership
• Insiders own 18% of Jiangsu Nhwa Pharmaceutical

A look at the shareholders of Jiangsu Nhwa Pharmaceutical Co., LTD (SZSE:002262) can tell us which group is most powerful. With 34% stake, retail 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.

As market cap fell to CN¥25b last week, retail investors 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 Nhwa Pharmaceutical.

What Does The Institutional Ownership Tell Us About Jiangsu Nhwa 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.

As you can see, institutional investors have a fair amount of stake in Jiangsu Nhwa Pharmaceutical. This implies the analysts working for those institutions have looked at the stock and they like it. But just like anyone else, they could be wrong. It is not uncommon to see a big share price drop if two large institutional investors try to sell out of a stock at the same time. So it is worth checking the past earnings trajectory of Jiangsu Nhwa Pharmaceutical, (below). Of course, keep in mind that there are other factors to consider, too.

Hedge funds don't have many shares in Jiangsu Nhwa Pharmaceutical. Xuzhou Nhwa Investment Co., Ltd. is currently the company's largest shareholder with 32% of shares outstanding. Pengsheng Sun is the second largest shareholder owning 4.9% of common stock, and Zengliang Chen holds about 3.9% of the company stock. Zengliang Chen, who is the third-largest shareholder, also happens to hold the title of Member of the Board of Directors.

We did some more digging and found that 6 of the top shareholders account for roughly 51% of the register, implying that along with larger shareholders, there are a few smaller shareholders, thereby balancing out each others interests somewhat.

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. There are a reasonable number of analysts covering the stock, so it might be useful to find out their aggregate view on the future.

Insider Ownership Of Jiangsu Nhwa Pharmaceutical

While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. 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 Nhwa Pharmaceutical Co., LTD. Insiders own CN¥4.4b worth of shares in the CN¥25b 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

With a 34% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Jiangsu Nhwa Pharmaceutical. While this size of ownership may not be enough to sway a policy decision in their favour, they can still make a collective impact on company policies.

Private Company Ownership

We can see that Private Companies own 32%, of the shares on issue. 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:

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.

Many find it useful to take an in depth look at how a company has performed in the past. You can access this detailed graph of past earnings, revenue and cash flow.

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.