Key Insights

• Significant insider control over LBX Pharmacy Chain implies vested interests in company growth
• A total of 3 investors have a majority stake in the company with 52% ownership
• Institutional ownership in LBX Pharmacy Chain is 22%

A look at the shareholders of LBX Pharmacy Chain Joint Stock Company (SHSE:603883) can tell us which group is most powerful. The group holding the most number of shares in the company, around 29% to be precise, is individual insiders. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

So it follows, every decision made by insiders of LBX Pharmacy Chain regarding the company's future would be crucial to them.

Let's delve deeper into each type of owner of LBX Pharmacy Chain, beginning with the chart below.

See our latest analysis for LBX Pharmacy Chain

What Does The Institutional Ownership Tell Us About LBX Pharmacy Chain?

Institutions typically measure themselves against a benchmark when reporting to their own investors, so they often become more enthusiastic about a stock once it's included in a major index. We would expect most companies to have some institutions on the register, especially if they are growing.

As you can see, institutional investors have a fair amount of stake in LBX Pharmacy Chain. 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. It is not uncommon to see a big share price drop if two large institutional investors try to sell out of a stock at the same time. So it is worth checking the past earnings trajectory of LBX Pharmacy Chain, (below). Of course, keep in mind that there are other factors to consider, too.

LBX Pharmacy Chain is not owned by hedge funds. Zilong Xie is currently the largest shareholder, with 28% of shares outstanding. In comparison, the second and third largest shareholders hold about 22% and 2.2% of the stock.

To make our study more interesting, we found that the top 3 shareholders have a majority ownership in the company, meaning that they are powerful enough to influence the decisions of the company.

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 are a reasonable number of analysts covering the stock, so it might be useful to find out their aggregate view on the future.

Insider Ownership Of LBX Pharmacy Chain

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. The company management answer to the board and the latter should represent the interests of shareholders. Notably, sometimes top-level managers are on the board themselves.

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 information suggests that insiders maintain a significant holding in LBX Pharmacy Chain Joint Stock Company. It has a market capitalization of just CN¥17b, and insiders have CN¥4.9b worth of shares in their own names. That's quite significant. Most would say this shows a good degree of alignment with shareholders, especially in a company of this size. You can click here to see if those insiders have been buying or selling.

General Public Ownership

The general public, who are usually individual investors, hold a 26% stake in LBX Pharmacy Chain. 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.

Private Company Ownership

Our data indicates that Private Companies hold 23%, of the company's shares. 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:

It's always worth thinking about the different groups who own shares in a company. But to understand LBX Pharmacy Chain better, we need to consider many other factors. For example, we've discovered 1 warning sign for LBX Pharmacy Chain that you should be aware of before investing here.

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.

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.