Yixintang Pharmaceutical Group Co., Ltd. (SZSE:002727) CEO Hong Xian Ruan, the company's largest shareholder sees 5.0% reduction in holdings value

Key Insights

• Insiders appear to have a vested interest in Yixintang Pharmaceutical Group's growth, as seen by their sizeable ownership
• 52% of the business is held by the top 4 shareholders
• Institutional ownership in Yixintang Pharmaceutical Group is 19%

If you want to know who really controls Yixintang Pharmaceutical Group Co., Ltd. (SZSE:002727), then you'll have to look at the makeup of its share registry. The group holding the most number of shares in the company, around 43% to be precise, is individual insiders. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

As a result, insiders as a group endured the highest losses after market cap fell by CN¥405m.

In the chart below, we zoom in on the different ownership groups of Yixintang Pharmaceutical Group.

View our latest analysis for Yixintang Pharmaceutical Group

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

Many institutions measure their performance against an index that approximates the local market. So they usually pay more attention to companies that are included in major indices.

As you can see, institutional investors have a fair amount of stake in Yixintang Pharmaceutical Group. 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 Yixintang Pharmaceutical Group, (below). Of course, keep in mind that there are other factors to consider, too.

Yixintang Pharmaceutical Group is not owned by hedge funds. The company's CEO Hong Xian Ruan is the largest shareholder with 31% of shares outstanding. Meanwhile, the second and third largest shareholders, hold 11% and 5.3%, of the shares outstanding, respectively.

To make our study more interesting, we found that the top 4 shareholders control more than half of the company which implies that this group has considerable sway over the company's decision-making.

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. 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 Yixintang Pharmaceutical Group

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.

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 most recent data indicates that insiders own a reasonable proportion of Yixintang Pharmaceutical Group Co., Ltd.. It is very interesting to see that insiders have a meaningful CN¥3.3b stake in this CN¥7.6b business. Most would be pleased to see the board is investing alongside them. You may wish to access this free chart showing recent trading by insiders.

General Public Ownership

With a 33% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Yixintang 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.

Public Company Ownership

Public companies currently own 5.3% of Yixintang Pharmaceutical Group stock. This may be a strategic interest and the two companies may have related business interests. It could be that they have de-merged. This holding is probably worth investigating further.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand Yixintang Pharmaceutical Group better, we need to consider many other factors. Consider for instance, the ever-present spectre of investment risk. We've identified 3 warning signs with Yixintang Pharmaceutical Group , and understanding them should be part of your investment process.

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.

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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.