The recent CN¥1.0b market cap decrease is likely to have disappointed insiders invested in DaShenLin Pharmaceutical Group Co., Ltd. (SHSE:603233)

Key Insights

• DaShenLin Pharmaceutical Group's significant insider ownership suggests inherent interests in company's expansion
• The top 3 shareholders own 57% of the company
• Institutions own 13% of DaShenLin Pharmaceutical Group

To get a sense of who is truly in control of DaShenLin Pharmaceutical Group Co., Ltd. (SHSE:603233), it is important to understand the ownership structure of the business. We can see that individual insiders own the lion's share in the company with 65% ownership. Put another way, the group faces the maximum upside potential (or downside risk).

And following last week's 6.0% decline in share price, insiders suffered the most losses.

Let's take a closer look to see what the different types of shareholders can tell us about DaShenLin Pharmaceutical Group.

Check out our latest analysis for DaShenLin Pharmaceutical Group

What Does The Institutional Ownership Tell Us About DaShenLin Pharmaceutical Group?

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.

DaShenLin Pharmaceutical Group 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 DaShenLin Pharmaceutical Group, (below). Of course, keep in mind that there are other factors to consider, too.

We note that hedge funds don't have a meaningful investment in DaShenLin Pharmaceutical Group. The company's largest shareholder is Yun Feng Ke, with ownership of 21%. Jin Long Ke is the second largest shareholder owning 20% of common stock, and Kang Bao Ke holds about 16% of the company stock.

A more detailed study of the shareholder registry showed us that 3 of the top shareholders have a considerable amount of ownership in the company, via their 57% stake.

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 plenty of analysts covering the stock, so it might be worth seeing what they are forecasting, too.

Insider Ownership Of DaShenLin Pharmaceutical Group

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.

I generally consider insider ownership to be a good thing. However, on some occasions it makes it more difficult for other shareholders to hold the board accountable for decisions.

Our most recent data indicates that insiders own the majority of DaShenLin Pharmaceutical Group Co., Ltd.. This means they can collectively make decisions for the company. Given it has a market cap of CN¥16b, that means insiders have a whopping CN¥10b worth of shares in their own names. It is good to see this level of investment. You can check here to see if those insiders have been selling any of their shares.

General Public Ownership

With a 23% ownership, the general public, mostly comprising of individual investors, have some degree of sway over DaShenLin Pharmaceutical Group. 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:

I find it very interesting to look at who exactly owns a company. But to truly gain insight, we need to consider other information, too. Case in point: We've spotted 1 warning sign for DaShenLin Pharmaceutical Group you should be aware of.

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com