Shaanxi Meibang Pharmaceutical Group Co., Ltd. (SHSE:605033) adds CN¥1.5b in market cap and insiders have a 58% stake in that gain

Key Insights

• Significant insider control over Shaanxi Meibang Pharmaceutical Group implies vested interests in company growth
• A total of 2 investors have a majority stake in the company with 53% ownership
• Using data from company's past performance alongside ownership research, one can better assess the future performance of a company

Every investor in Shaanxi Meibang Pharmaceutical Group Co., Ltd. (SHSE:605033) should be aware of the most powerful shareholder groups. The group holding the most number of shares in the company, around 58% to be precise, is individual insiders. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

As a result, insiders scored the highest last week as the company hit CN¥3.8b market cap following a 61% gain in the stock.

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

View our latest analysis for Shaanxi Meibang Pharmaceutical Group

What Does The Institutional Ownership Tell Us About Shaanxi Meibang 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.

Since institutions own only a small portion of Shaanxi Meibang Pharmaceutical Group, many may not have spent much time considering the stock. But it's clear that some have; and they liked it enough to buy in. If the business gets stronger from here, we could see a situation where more institutions are keen to buy. We sometimes see a rising share price when a few big institutions want to buy a certain stock at the same time. The history of earnings and revenue, which you can see below, could be helpful in considering if more institutional investors will want the stock. Of course, there are plenty of other factors to consider, too.

We note that hedge funds don't have a meaningful investment in Shaanxi Meibang Pharmaceutical Group. The company's largest shareholder is Shaowu Zhang, with ownership of 46%. The second and third largest shareholders are Tong Zhang and Shaanxi Tongmei Industrial Co., Ltd., with an equal amount of shares to their name at 6.7%. Tong Zhang, who is the second-largest shareholder, also happens to hold the title of Chief Executive Officer.

After doing some more digging, we found that the top 2 shareholders collectively control more than half of the company's shares, implying that they have considerable power to influence the company's decisions.

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. 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 Shaanxi Meibang Pharmaceutical Group

The definition of company insiders can be subjective and does vary between jurisdictions. Our data reflects individual insiders, capturing board members at the very least. Company management run the business, but the CEO will answer to the board, even if he or she is a member of it.

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.

It seems that insiders own more than half the Shaanxi Meibang Pharmaceutical Group Co., Ltd. stock. This gives them a lot of power. That means they own CN¥2.2b worth of shares in the CN¥3.8b company. That's quite meaningful. It is good to see this level of investment. You can check here to see if those insiders have been buying recently.

General Public Ownership

The general public, who are usually individual investors, hold a 26% stake in Shaanxi Meibang 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.

Private Company Ownership

Our data indicates that Private Companies hold 13%, of the company's shares. It's hard to draw any conclusions from this fact alone, so its worth looking into who owns those private companies. Sometimes insiders or other related parties have an interest in shares in a public company through a separate private company.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand Shaanxi Meibang Pharmaceutical Group better, we need to consider many other factors. For instance, we've identified 4 warning signs for Shaanxi Meibang Pharmaceutical Group (1 is potentially serious) that you should be aware of.

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.