Insiders the biggest winners as Hunan Dajiaweikang Pharmaceutical Industry Co.,Ltd's (SZSE:301126) market cap rises to CN¥2.2b

Key Insights

• Significant insider control over Hunan Dajiaweikang Pharmaceutical IndustryLtd implies vested interests in company growth
• The top 4 shareholders own 53% of the company
• 12% of Hunan Dajiaweikang Pharmaceutical IndustryLtd is held by Institutions

A look at the shareholders of Hunan Dajiaweikang Pharmaceutical Industry Co.,Ltd (SZSE:301126) can tell us which group is most powerful. And the group that holds the biggest piece of the pie are individual insiders with 44% ownership. Put another way, the group faces the maximum upside potential (or downside risk).

Clearly, insiders benefitted the most after the company's market cap rose by CN¥250m last week.

In the chart below, we zoom in on the different ownership groups of Hunan Dajiaweikang Pharmaceutical IndustryLtd.

Check out our latest analysis for Hunan Dajiaweikang Pharmaceutical IndustryLtd

What Does The Institutional Ownership Tell Us About Hunan Dajiaweikang Pharmaceutical IndustryLtd?

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 Hunan Dajiaweikang Pharmaceutical IndustryLtd 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. If multiple institutions change their view on a stock at the same time, you could see the share price drop fast. It's therefore worth looking at Hunan Dajiaweikang Pharmaceutical IndustryLtd's earnings history below. Of course, the future is what really matters.

Hedge funds don't have many shares in Hunan Dajiaweikang Pharmaceutical IndustryLtd. The company's largest shareholder is Yiqing Wang, with ownership of 34%. Meanwhile, the second and third largest shareholders, hold 9.3% and 5.0%, of the shares outstanding, respectively.

On looking further, we found that 53% of the shares are owned by the top 4 shareholders. In other words, these shareholders have a meaningful say in the decisions of the company.

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. Our information suggests that there isn't any analyst coverage of the stock, so it is probably little known.

Insider Ownership Of Hunan Dajiaweikang Pharmaceutical IndustryLtd

While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. 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 a reasonable proportion of Hunan Dajiaweikang Pharmaceutical Industry Co.,Ltd. It has a market capitalization of just CN¥2.2b, and insiders have CN¥938m worth of shares in their own names. This may suggest that the founders still own a lot of shares. You can click here to see if they have been buying or selling.

General Public Ownership

The general public-- including retail investors -- own 39% stake in the company, and hence can't easily be ignored. 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 Company Ownership

It seems that Private Companies own 4.7%, of the Hunan Dajiaweikang Pharmaceutical IndustryLtd 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.

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 4 warning signs with Hunan Dajiaweikang Pharmaceutical IndustryLtd (at least 3 which are significant) , and understanding them should be part of your investment process.

Of course this may not be the best stock to buy. So take a peek at this free 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.

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