Following recent decline, Anhui Huaren Health Pharmaceutical Co., Ltd.'s (SZSE:301408) top shareholder Senior Key Executive Jiale He sees holdings value drop by 11%

Key Insights

• Insiders appear to have a vested interest in Anhui Huaren Health Pharmaceutical's growth, as seen by their sizeable ownership
• The largest shareholder of the company is Jiale He with a 50% stake
• Ownership research, combined with past performance data can help provide a good understanding of opportunities in a stock

If you want to know who really controls Anhui Huaren Health Pharmaceutical Co., Ltd. (SZSE:301408), then you'll have to look at the makeup of its share registry. With 57% stake, individual insiders possess the maximum shares in the company. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

As market cap fell to CN¥4.3b last week, insiders would have faced the highest losses than any other shareholder groups of the company.

Let's delve deeper into each type of owner of Anhui Huaren Health Pharmaceutical, beginning with the chart below.

View our latest analysis for Anhui Huaren Health Pharmaceutical

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

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.

We can see that Anhui Huaren Health Pharmaceutical does have institutional investors; and they hold a good portion of the company's stock. 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. 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.

Hedge funds don't have many shares in Anhui Huaren Health Pharmaceutical. Our data suggests that Jiale He, who is also the company's Senior Key Executive, holds the most number of shares at 50%. When an insider holds a sizeable amount of a company's stock, investors consider it as a positive sign because it suggests that insiders are willing to have their wealth tied up in the future of the company. Meanwhile, the second and third largest shareholders, hold 7.5% and 6.9%, of the shares outstanding, respectively. Interestingly, the third-largest shareholder, Jialun He is also a Member of the Board of Directors, again, indicating strong insider ownership amongst the company's top shareholders.

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. As far as we can tell there isn't analyst coverage of the company, so it is probably flying under the radar.

Insider Ownership Of Anhui Huaren Health Pharmaceutical

The definition of an insider can differ slightly between different countries, but members of the board of directors always count. 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 information suggests that insiders own more than half of Anhui Huaren Health Pharmaceutical Co., Ltd.. This gives them effective control of the company. 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, who are usually individual investors, hold a 17% stake in Anhui Huaren Health Pharmaceutical. 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.

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 4.8%, of the Anhui Huaren Health Pharmaceutical 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.

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:

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. Consider for instance, the ever-present spectre of investment risk. We've identified 3 warning signs with Anhui Huaren Health Pharmaceutical (at least 1 which doesn't sit too well with us) , and understanding them should be part of your investment process.

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.

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.