Key Insights

• China Shineway Pharmaceutical Group's significant insider ownership suggests inherent interests in company's expansion
• Zhenjiang Li owns 72% of the company
• Ownership research along with analyst forecasts data help provide a good understanding of opportunities in a stock

Every investor in China Shineway Pharmaceutical Group Limited (HKG:2877) should be aware of the most powerful shareholder groups. And the group that holds the biggest piece of the pie are individual insiders with 73% ownership. Put another way, the group faces the maximum upside potential (or downside risk).

As market cap fell to HK$6.4b last week, insiders would have faced the highest losses than any other shareholder groups of the company.

Let's take a closer look to see what the different types of shareholders can tell us about China Shineway Pharmaceutical Group.

What Does The Institutional Ownership Tell Us About China Shineway Pharmaceutical Group?

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 China Shineway Pharmaceutical Group. This implies the analysts working for those institutions have looked at the stock and they like it. But just like anyone else, they could be wrong. 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 China Shineway Pharmaceutical Group's earnings history below. Of course, the future is what really matters.

Hedge funds don't have many shares in China Shineway Pharmaceutical Group. From our data, we infer that the largest shareholder is Zhenjiang Li (who also holds the title of Top Key Executive) with 72% of shares outstanding. Its usually considered a good sign when insiders own a significant number of shares in the company, and in this case, we're glad to see a company insider play the role of a key stakeholder. For context, the second largest shareholder holds about 1.5% of the shares outstanding, followed by an ownership of 1.1% 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. Quite a few analysts cover the stock, so you could look into forecast growth quite easily.

Insider Ownership Of China Shineway Pharmaceutical Group

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

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 information suggests that insiders own more than half of China Shineway Pharmaceutical Group Limited. This gives them effective control of the company. So they have a HK$4.6b stake in this HK$6.4b business. Most would argue this is a positive, showing strong alignment with shareholders. You can click here to see if those insiders have been buying or selling.

General Public Ownership

The general public-- including retail investors -- own 21% stake in the company, and hence can't easily be ignored. While this size of ownership may not be enough to sway a policy decision in their favour, they can still make a collective impact on company policies.

Next Steps:

While it is well worth considering the different groups that own a company, there are other factors that are even more important. To that end, you should be aware of the 1 warning sign we've spotted with China Shineway Pharmaceutical Group .

But ultimately it is the future, not the past, that will determine how well the owners of this business will do. Therefore we think it advisable to take a look at this free report showing whether analysts are predicting a brighter 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.