Key Insights

• Jiangsu Aidea Pharmaceutical's significant private companies ownership suggests that the key decisions are influenced by shareholders from the larger public
• A total of 4 investors have a majority stake in the company with 52% ownership
• 28% of Jiangsu Aidea Pharmaceutical is held by insiders

Every investor in Jiangsu Aidea Pharmaceutical Co., Ltd. (SHSE:688488) should be aware of the most powerful shareholder groups. And the group that holds the biggest piece of the pie are private companies with 29% ownership. Put another way, the group faces the maximum upside potential (or downside risk).

While insiders who own 28% came under pressure after market cap dropped to CN¥5.4b last week,private companies took the most losses.

In the chart below, we zoom in on the different ownership groups of Jiangsu Aidea Pharmaceutical.

Check out our latest analysis for Jiangsu Aidea Pharmaceutical

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

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.

As you can see, institutional investors have a fair amount of stake in Jiangsu Aidea Pharmaceutical. 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. When multiple institutions own a stock, there's always a risk that they are in a 'crowded trade'. When such a trade goes wrong, multiple parties may compete to sell stock fast. This risk is higher in a company without a history of growth. You can see Jiangsu Aidea Pharmaceutical's historic earnings and revenue below, but keep in mind there's always more to the story.

We note that hedge funds don't have a meaningful investment in Jiangsu Aidea Pharmaceutical. Our data shows that Guangzhou Weimei Investment Co., Ltd. is the largest shareholder with 22% of shares outstanding. Meanwhile, the second and third largest shareholders, hold 22% and 3.8%, of the shares outstanding, respectively.

On looking further, we found that 52% 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.

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 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.

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.

It seems insiders own a significant proportion of Jiangsu Aidea Pharmaceutical Co., Ltd.. Insiders have a CN¥1.5b stake in this CN¥5.4b 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 25% 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 29%, 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 be aware of the 1 warning sign we've spotted with Jiangsu Aidea Pharmaceutical .

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.