Key Insights

• Significant control over Sichuan Huiyu Pharmaceutical by individual investors implies that the general public has more power to influence management and governance-related decisions
• A total of 7 investors have a majority stake in the company with 52% ownership
• Insiders own 42% of Sichuan Huiyu Pharmaceutical

Every investor in Sichuan Huiyu Pharmaceutical Co., Ltd. (SHSE:688553) should be aware of the most powerful shareholder groups. With 43% stake, individual 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).

Individual investors gained the most after market cap touched CN¥4.9b last week, while insiders who own 42% also benefitted.

In the chart below, we zoom in on the different ownership groups of Sichuan Huiyu Pharmaceutical.

What Does The Institutional Ownership Tell Us About Sichuan Huiyu 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 Sichuan Huiyu Pharmaceutical. 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. 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 Sichuan Huiyu Pharmaceutical's earnings history below. Of course, the future is what really matters.

Hedge funds don't have many shares in Sichuan Huiyu Pharmaceutical. With a 27% stake, CEO Zhao Ding is the largest shareholder. For context, the second largest shareholder holds about 10% of the shares outstanding, followed by an ownership of 5.0% by the third-largest shareholder.

We did some more digging and found that 7 of the top shareholders account for roughly 52% of the register, implying that along with larger shareholders, there are a few smaller shareholders, thereby balancing out each others interests somewhat.

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. As far as we can tell there isn't analyst coverage of the company, so it is probably flying under the radar.

Insider Ownership Of Sichuan Huiyu 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.

Most consider insider ownership a positive because it can indicate the board is well aligned with other shareholders. However, on some occasions too much power is concentrated within this group.

Our most recent data indicates that insiders own a reasonable proportion of Sichuan Huiyu Pharmaceutical Co., Ltd.. Insiders have a CN¥2.1b stake in this CN¥4.9b business. This may suggest that the founders still own a lot of shares. You can click here to see if they have been buying or selling.

General Public Ownership

The general public-- including retail investors -- own 43% stake in the company, and hence can't easily be ignored. 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

It seems that Private Companies own 8.6%, of the Sichuan Huiyu Pharmaceutical stock. 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 Sichuan Huiyu Pharmaceutical better, we need to consider many other factors. Case in point: We've spotted 3 warning signs for Sichuan Huiyu Pharmaceutical you should be aware of, and 1 of them doesn't sit too well with us.

Of course this may not be the best stock to buy. So take a peek at this free free list of interesting companies.

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.

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