Key Insights

• Insiders appear to have a vested interest in Nanjing King-Friend Biochemical PharmaceuticalLtd's growth, as seen by their sizeable ownership
• The top 3 shareholders own 68% of the company
• Using data from analyst forecasts alongside ownership research, one can better assess the future performance of a company

A look at the shareholders of Nanjing King-Friend Biochemical Pharmaceutical Co.,Ltd. (SHSE:603707) can tell us which group is most powerful. And the group that holds the biggest piece of the pie are individual insiders with 52% ownership. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

Clearly, insiders benefitted the most after the company's market cap rose by CN¥741m last week.

Let's delve deeper into each type of owner of Nanjing King-Friend Biochemical PharmaceuticalLtd, beginning with the chart below.

What Does The Institutional Ownership Tell Us About Nanjing King-Friend Biochemical PharmaceuticalLtd?

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 Nanjing King-Friend Biochemical PharmaceuticalLtd. 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 Nanjing King-Friend Biochemical PharmaceuticalLtd's historic earnings and revenue below, but keep in mind there's always more to the story.

Hedge funds don't have many shares in Nanjing King-Friend Biochemical PharmaceuticalLtd. Our data shows that Ju Hua Xie is the largest shareholder with 27% of shares outstanding. For context, the second largest shareholder holds about 21% of the shares outstanding, followed by an ownership of 20% by the third-largest shareholder.

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.

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 Nanjing King-Friend Biochemical PharmaceuticalLtd

While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. 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.

Our most recent data indicates that insiders own the majority of Nanjing King-Friend Biochemical Pharmaceutical Co.,Ltd.. This means they can collectively make decisions for the company. That means insiders have a very meaningful CN¥11b stake in this CN¥22b business. Most would argue this is a positive, showing strong alignment with shareholders. You can click here to see if they have been selling down their stake.

General Public Ownership

With a 18% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Nanjing King-Friend Biochemical PharmaceuticalLtd. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.

Private Company Ownership

Our data indicates that Private Companies hold 21%, 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:

While it is well worth considering the different groups that own a company, there are other factors that are even more important. Consider for instance, the ever-present spectre of investment risk. We've identified 1 warning sign with Nanjing King-Friend Biochemical PharmaceuticalLtd , and understanding them should be part of your investment process.

Ultimately the future is most important. You can access this free report on analyst forecasts for the company.

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.