Key Insights
- Guangdong Zhongsheng Pharmaceutical's significant retail investors ownership suggests that the key decisions are influenced by shareholders from the larger public
- 42% of the business is held by the top 25 shareholders
- Insiders own 28% of Guangdong Zhongsheng Pharmaceutical
A look at the shareholders of Guangdong Zhongsheng Pharmaceutical Co., Ltd. (SZSE:002317) can tell us which group is most powerful. With 57% 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 the holdings of retail investors took a hit after last week's 4.1% price drop, insiders with their 28% also suffered.
Let's take a closer look to see what the different types of shareholders can tell us about Guangdong Zhongsheng Pharmaceutical.
What Does The Institutional Ownership Tell Us About Guangdong Zhongsheng 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 Guangdong Zhongsheng 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. 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 Guangdong Zhongsheng Pharmaceutical's historic earnings and revenue below, but keep in mind there's always more to the story.
We note that hedge funds don't have a meaningful investment in Guangdong Zhongsheng Pharmaceutical. From our data, we infer that the largest shareholder is Yuchong Zhang (who also holds the title of Senior Key Executive) with 11% 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. With 11% and 2.9% of the shares outstanding respectively, Yuli Zhang and National Council for Social Security Fund are the second and third largest shareholders. Additionally, the company's CEO Yong Hong Chen directly holds 1.6% of the total shares outstanding.
A deeper look at our ownership data shows that the top 25 shareholders collectively hold less than half of the register, suggesting a large group of small holders where no single shareholder has a majority.
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 is a little analyst coverage of the stock, but not much. So there is room for it to gain more coverage.
Insider Ownership Of Guangdong Zhongsheng 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. 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.
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 Guangdong Zhongsheng Pharmaceutical Co., Ltd.. It is very interesting to see that insiders have a meaningful CN¥3.5b stake in this CN¥13b 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 substantial 57% stake in Guangdong Zhongsheng Pharmaceutical, suggesting it is a fairly popular stock. This size of ownership gives investors from the general public some collective power. They can and probably do influence decisions on executive compensation, dividend policies and proposed business acquisitions.
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 learn about the 4 warning signs we've spotted with Guangdong Zhongsheng Pharmaceutical (including 1 which is 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.