Key Insights

• Significant insider control over Chongqing Zhifei Biological Products implies vested interests in company growth
• 54% of the business is held by the top 2 shareholders
• 17% of Chongqing Zhifei Biological Products is held by Institutions

A look at the shareholders of Chongqing Zhifei Biological Products Co., Ltd. (SZSE:300122) can tell us which group is most powerful. And the group that holds the biggest piece of the pie are individual insiders with 59% ownership. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

So, insiders of Chongqing Zhifei Biological Products have a lot at stake and every decision they make on the company's future is important to them from a financial point of view.

Let's delve deeper into each type of owner of Chongqing Zhifei Biological Products, beginning with the chart below.

What Does The Institutional Ownership Tell Us About Chongqing Zhifei Biological Products?

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.

Chongqing Zhifei Biological Products already has institutions on the share registry. Indeed, they own a respectable stake in the company. 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 Chongqing Zhifei Biological Products, (below). Of course, keep in mind that there are other factors to consider, too.

Chongqing Zhifei Biological Products is not owned by hedge funds. The company's CEO Rensheng Jiang is the largest shareholder with 48% of shares outstanding. Lingfeng Jiang is the second largest shareholder owning 5.4% of common stock, and Tie Ying Liu holds about 3.8% of the company stock.

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.

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 Chongqing Zhifei Biological Products

The definition of an insider can differ slightly between different countries, but members of the board of directors always count. Company management run the business, but the CEO will answer to the board, even if he or she is a member of it.

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 own more than half of Chongqing Zhifei Biological Products Co., Ltd.. This gives them effective control of the company. That means insiders have a very meaningful CN¥76b stake in this CN¥129b business. Most would be pleased to see the board is investing alongside them. You may wish to discover if they have been buying or selling.

General Public Ownership

The general public-- including retail investors -- own 24% 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:

It's always worth thinking about the different groups who own shares in a company. But to understand Chongqing Zhifei Biological Products better, we need to consider many other factors. Take risks for example - Chongqing Zhifei Biological Products has 2 warning signs (and 1 which is concerning) we think you should know about.

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.