Key Insights

• The considerable ownership by private equity firms in Chongqing Genrix Biopharmaceutical indicates that they collectively have a greater say in management and business strategy
• The largest shareholder of the company is Chongqing Zhirui Investment Co., Ltd. with a 55% stake
• 11% of Chongqing Genrix Biopharmaceutical is held by Institutions

If you want to know who really controls Chongqing Genrix Biopharmaceutical Co., Ltd. (SHSE:688443), then you'll have to look at the makeup of its share registry. We can see that private equity firms own the lion's share in the company with 55% ownership. Put another way, the group faces the maximum upside potential (or downside risk).

Clearly, private equity firms benefitted the most after the company's market cap rose by CN¥1.9b last week.

Let's take a closer look to see what the different types of shareholders can tell us about Chongqing Genrix Biopharmaceutical.

What Does The Institutional Ownership Tell Us About Chongqing Genrix Biopharmaceutical?

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.

We can see that Chongqing Genrix Biopharmaceutical does have institutional investors; and they hold a good portion of the company's stock. This can indicate that the company has a certain degree of credibility in the investment community. However, it is best to be wary of relying on the supposed validation that comes with institutional investors. They too, get it wrong sometimes. 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 Genrix Biopharmaceutical, (below). Of course, keep in mind that there are other factors to consider, too.

Chongqing Genrix Biopharmaceutical is not owned by hedge funds. Looking at our data, we can see that the largest shareholder is Chongqing Zhirui Investment Co., Ltd. with 55% of shares outstanding. With such a huge stake in the ownership, we infer that they have significant control of the future of the company. Meanwhile, the second and third largest shareholders, hold 4.0% and 3.1%, of the shares outstanding, respectively.

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. Quite a few analysts cover the stock, so you could look into forecast growth quite easily.

Insider Ownership Of Chongqing Genrix Biopharmaceutical

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.

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.

We can see that insiders own shares in Chongqing Genrix Biopharmaceutical Co., Ltd.. This is a big company, so it is good to see this level of alignment. Insiders own CN¥856m worth of shares (at current prices). If you would like to explore the question of insider alignment, you can click here to see if insiders have been buying or selling.

General Public Ownership

With a 20% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Chongqing Genrix Biopharmaceutical. 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 Equity Ownership

With an ownership of 55%, private equity firms are in a position to play a role in shaping corporate strategy with a focus on value creation. Some might like this, because private equity are sometimes activists who hold management accountable. But other times, private equity is selling out, having taking the company public.

Private Company Ownership

It seems that Private Companies own 8.5%, of the Chongqing Genrix Biopharmaceutical stock. It might be worth looking deeper into this. If related parties, such as insiders, have an interest in one of these private companies, that should be disclosed in the annual report. Private companies may also have a strategic interest in the company.

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 2 warning signs we've spotted with Chongqing Genrix Biopharmaceutical (including 1 which is potentially serious) .

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.