Key Insights

• C.Q. Pharmaceutical Holding's significant private companies ownership suggests that the key decisions are influenced by shareholders from the larger public
• A total of 2 investors have a majority stake in the company with 55% ownership
• Ownership research, combined with past performance data can help provide a good understanding of opportunities in a stock

Every investor in C.Q. Pharmaceutical Holding Co., Ltd. (SZSE:000950) should be aware of the most powerful shareholder groups. We can see that private companies own the lion's share in the company with 57% ownership. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

As a result, private companies collectively scored the highest last week as the company hit CN¥9.5b market cap following a 4.8% gain in the stock.

Let's take a closer look to see what the different types of shareholders can tell us about C.Q. Pharmaceutical Holding.

What Does The Institutional Ownership Tell Us About C.Q. Pharmaceutical Holding?

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.

C.Q. Pharmaceutical Holding 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. 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 C.Q. Pharmaceutical Holding's historic earnings and revenue below, but keep in mind there's always more to the story.

C.Q. Pharmaceutical Holding is not owned by hedge funds. Looking at our data, we can see that the largest shareholder is Chongqing Pharmaceutical Health Industry Co., Ltd. with 38% of shares outstanding. For context, the second largest shareholder holds about 16% of the shares outstanding, followed by an ownership of 3.2% by the third-largest shareholder.

After doing some more digging, we found that the top 2 shareholders collectively control more than half of the company's shares, implying that they have considerable power to influence the company's decisions.

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 is a little analyst coverage of the stock, but not much. So there is room for it to gain more coverage.

Insider Ownership Of C.Q. Pharmaceutical Holding

While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. 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.

Our most recent data indicates that insiders own less than 1% of C.Q. Pharmaceutical Holding Co., Ltd.. But they may have an indirect interest through a corporate structure that we haven't picked up on. Keep in mind that it's a big company, and the insiders own CN¥2.3m worth of shares. The absolute value might be more important than the proportional share. It is good to see board members owning shares, but it might be worth checking if those insiders have been buying.

General Public Ownership

With a 30% ownership, the general public, mostly comprising of individual investors, have some degree of sway over C.Q. Pharmaceutical Holding. 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 57%, 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.

Public Company Ownership

We can see that public companies hold 3.8% of the C.Q. Pharmaceutical Holding shares on issue. It's hard to say for sure but this suggests they have entwined business interests. This might be a strategic stake, so it's worth watching this space for changes in ownership.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand C.Q. Pharmaceutical Holding better, we need to consider many other factors. To that end, you should learn about the 3 warning signs we've spotted with C.Q. Pharmaceutical Holding (including 1 which is a bit concerning) .

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.