Key Insights

• The considerable ownership by retail investors in Yantai Dongcheng Pharmaceutical GroupLtd indicates that they collectively have a greater say in management and business strategy
• A total of 16 investors have a majority stake in the company with 50% ownership
• Insider ownership in Yantai Dongcheng Pharmaceutical GroupLtd is 13%

Every investor in Yantai Dongcheng Pharmaceutical Group Co.,Ltd. (SZSE:002675) should be aware of the most powerful shareholder groups. With 45% stake, retail investors possess the maximum shares in the company. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

While institutions who own 22% came under pressure after market cap dropped to CN¥11b last week,retail investors took the most losses.

In the chart below, we zoom in on the different ownership groups of Yantai Dongcheng Pharmaceutical GroupLtd.

What Does The Institutional Ownership Tell Us About Yantai Dongcheng Pharmaceutical GroupLtd?

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.

We can see that Yantai Dongcheng Pharmaceutical GroupLtd does have institutional investors; and they hold a good portion of the company's stock. 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 Yantai Dongcheng Pharmaceutical GroupLtd, (below). Of course, keep in mind that there are other factors to consider, too.

Yantai Dongcheng Pharmaceutical GroupLtd is not owned by hedge funds. Looking at our data, we can see that the largest shareholder is Yantai Dongyi Bioengineering Co., Ltd. with 15% of shares outstanding. With 13% and 4.9% of the shares outstanding respectively, Shouyi You and SDIC Juli Investment Management Co., Ltd. are the second and third largest shareholders. In addition, we found that Zhi Gang Luo, the CEO has 0.6% of the shares allocated to their name.

After doing some more digging, we found that the top 16 have the combined ownership of 50% in the company, suggesting that no single shareholder has significant control over 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 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 Yantai Dongcheng Pharmaceutical GroupLtd

The definition of an insider can differ slightly between different countries, but members of the board of directors always count. 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.

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 information suggests that insiders maintain a significant holding in Yantai Dongcheng Pharmaceutical Group Co.,Ltd.. It is very interesting to see that insiders have a meaningful CN¥1.5b stake in this CN¥11b business. 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, who are usually individual investors, hold a 45% stake in Yantai Dongcheng Pharmaceutical GroupLtd. 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 20%, 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. Consider risks, for instance. Every company has them, and we've spotted 1 warning sign for Yantai Dongcheng Pharmaceutical GroupLtd 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.