Key Insights

• Significant control over Chongqing Genrix Biopharmaceutical by private equity firms implies that the general public has more power to influence management and governance-related decisions
• 55% of the company is held by a single shareholder (Chongqing Zhirui Investment Co., Ltd.)
• 17% of Chongqing Genrix Biopharmaceutical is held by Institutions

Every investor in Chongqing Genrix Biopharmaceutical Co., Ltd. (SHSE:688443) should be aware of the most powerful shareholder groups. The group holding the most number of shares in the company, around 55% to be precise, is private equity firms. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

Following a 12% decrease in the stock price last week, private equity firms suffered the most losses, but institutions who own 17% stock also took a hit.

Let's delve deeper into each type of owner of Chongqing Genrix Biopharmaceutical, beginning with the chart below.

What Does The Institutional Ownership Tell Us About Chongqing Genrix Biopharmaceutical?

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 Chongqing Genrix Biopharmaceutical 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. 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 Chongqing Genrix Biopharmaceutical's historic earnings and revenue below, but keep in mind there's always more to the story.

Chongqing Genrix Biopharmaceutical is not owned by hedge funds. The company's largest shareholder is Chongqing Zhirui Investment Co., Ltd., with ownership of 55%. This essentially means that they have extensive influence, if not outright control, over the future of the corporation. For context, the second largest shareholder holds about 4.0% of the shares outstanding, followed by an ownership of 3.6% by the third-largest shareholder.

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. There are plenty of analysts covering the stock, so it might be worth seeing what they are forecasting, too.

Insider Ownership Of Chongqing Genrix Biopharmaceutical

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. Management ultimately answers to the board. However, it is not uncommon for managers to be executive board members, especially if they are a founder or the CEO.

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.

We can report that insiders do own shares in Chongqing Genrix Biopharmaceutical Co., Ltd.. It is a pretty big company, so it is generally a positive to see some potentially meaningful alignment. In this case, they own around CN¥611m worth of shares (at current prices). If you would like to explore the question of insider alignment, you can click here to see if insiders have been buying or selling.

General Public Ownership

The general public-- including retail investors -- own 14% 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 Equity Ownership

Private equity firms hold a 55% stake in Chongqing Genrix Biopharmaceutical. This suggests they can be influential in key policy decisions. Sometimes we see private equity stick around for the long term, but generally speaking they have a shorter investment horizon and -- as the name suggests -- don't invest in public companies much. After some time they may look to sell and redeploy capital elsewhere.

Private Company Ownership

We can see that Private Companies own 8.5%, 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:

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. For instance, we've identified 3 warning signs for Chongqing Genrix Biopharmaceutical (1 shouldn't be ignored) that you should be aware of.

If you are like me, you may want to think about whether this company will grow or shrink. Luckily, you can check this free report showing analyst forecasts for its future.

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.