Key Insights

• Insiders appear to have a vested interest in Jiangsu Aidea Pharmaceutical's growth, as seen by their sizeable ownership
• 53% of the business is held by the top 4 shareholders
• Institutions own 20% of Jiangsu Aidea Pharmaceutical

A look at the shareholders of Jiangsu Aidea Pharmaceutical Co., Ltd. (SHSE:688488) can tell us which group is most powerful. With 28% stake, individual insiders possess the maximum shares in the company. Put another way, the group faces the maximum upside potential (or downside risk).

And following last week's 12% decline in share price, insiders suffered the most losses.

Let's delve deeper into each type of owner of Jiangsu Aidea Pharmaceutical, beginning with the chart below.

What Does The Institutional Ownership Tell Us About Jiangsu Aidea 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.

Jiangsu Aidea Pharmaceutical already has institutions on the share registry. Indeed, they own a respectable stake in the company. This suggests some credibility amongst professional investors. But we can't rely on that fact alone since institutions make bad investments sometimes, just like everyone does. 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 Aidea Pharmaceutical, (below). Of course, keep in mind that there are other factors to consider, too.

Jiangsu Aidea Pharmaceutical is not owned by hedge funds. Looking at our data, we can see that the largest shareholder is Guangzhou Weimei Investment Co., Ltd. with 22% of shares outstanding. For context, the second largest shareholder holds about 22% of the shares outstanding, followed by an ownership of 4.7% by the third-largest shareholder.

To make our study more interesting, we found that the top 4 shareholders control more than half of the company which implies that this group has considerable sway over the company's decision-making.

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. 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. 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.

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.. It has a market capitalization of just CN¥5.9b, and insiders have CN¥1.7b worth of shares in their own names. We would say this shows alignment with shareholders, but it is worth noting that the company is still quite small; some insiders may have founded the business. You can click here to see if those insiders have been buying or selling.

General Public Ownership

With a 25% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Jiangsu Aidea Pharmaceutical. 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

Our data indicates that Private Companies hold 27%, of the company's shares. 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:

It's always worth thinking about the different groups who own shares in a company. But to understand Jiangsu Aidea Pharmaceutical better, we need to consider many other factors. Case in point: We've spotted 1 warning sign for Jiangsu Aidea Pharmaceutical you should be aware of.

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.