Anhui Huaren Health Pharmaceutical Co., Ltd. (SZSE:301408) adds CN¥508m in market cap and insiders have a 57% stake in that gain

Key Insights

• Significant insider control over Anhui Huaren Health Pharmaceutical implies vested interests in company growth
• The largest shareholder of the company is Jiale He with a 50% stake
• Using data from company's past performance alongside ownership research, one can better assess the future performance of a company

To get a sense of who is truly in control of Anhui Huaren Health Pharmaceutical Co., Ltd. (SZSE:301408), 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 57% ownership. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

As a result, insiders scored the highest last week as the company hit CN¥4.3b market cap following a 13% gain in the stock.

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

View our latest analysis for Anhui Huaren Health Pharmaceutical

What Does The Institutional Ownership Tell Us About Anhui Huaren Health Pharmaceutical?

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.

Anhui Huaren Health Pharmaceutical 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 Anhui Huaren Health Pharmaceutical, (below). Of course, keep in mind that there are other factors to consider, too.

Anhui Huaren Health Pharmaceutical is not owned by hedge funds. Jiale He is currently the company's largest shareholder with 50% of shares outstanding. This essentially means that they have extensive influence, if not outright control, over the future of the corporation. For context, the second largest shareholder holds about 7.5% of the shares outstanding, followed by an ownership of 6.9% by the third-largest shareholder. Jialun He, who is the third-largest shareholder, also happens to hold the title of Member of the Board of Directors.

While it makes sense to study institutional ownership data for a company, it also makes sense to study analyst sentiments to know which way the wind is blowing. We're not picking up on any analyst coverage of the stock at the moment, so the company is unlikely to be widely held.

Insider Ownership Of Anhui Huaren Health Pharmaceutical

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.

It seems that insiders own more than half the Anhui Huaren Health Pharmaceutical Co., Ltd. stock. This gives them a lot of power. Given it has a market cap of CN¥4.3b, that means they have CN¥2.5b worth of shares. Most would be pleased to see the board is investing alongside them. You may wish todiscover (for free) if they have been buying or selling.

General Public Ownership

The general public-- including retail investors -- own 15% stake in the company, and hence can't easily be ignored. 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 a stake of 5.2%, private equity firms could influence the Anhui Huaren Health Pharmaceutical board. 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 5.3%, of the Anhui Huaren Health Pharmaceutical stock. Private companies may be related parties. Sometimes insiders have an interest in a public company through a holding in a private company, rather than in their own capacity as an individual. While it's hard to draw any broad stroke conclusions, it is worth noting as an area for further research.

Public Company Ownership

Public companies currently own 7.5% of Anhui Huaren Health Pharmaceutical stock. It's hard to say for sure but this suggests they have entwined business interests. This might be a strategic stake, so it's worth watching this space for changes in ownership.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand Anhui Huaren Health Pharmaceutical better, we need to consider many other factors. Be aware that Anhui Huaren Health Pharmaceutical is showing 2 warning signs in our investment analysis , you should know about...

If you would prefer check out another company -- one with potentially superior financials -- then do not miss this free list of interesting companies, backed by strong financial data.

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.