Retail investors who hold 51% of Henan Lingrui Pharmaceutical Co., Ltd. (SHSE:600285) gained 3.7%, institutions profited as well

Key Insights

• Henan Lingrui Pharmaceutical's significant retail investors ownership suggests that the key decisions are influenced by shareholders from the larger public
• The top 25 shareholders own 45% of the company
• 25% of Henan Lingrui Pharmaceutical is held by Institutions

A look at the shareholders of Henan Lingrui Pharmaceutical Co., Ltd. (SHSE:600285) can tell us which group is most powerful. We can see that retail investors own the lion's share in the company with 51% ownership. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

While retail investors were the group that reaped the most benefits after last week’s 3.7% price gain, institutions also received a 25% cut.

Let's delve deeper into each type of owner of Henan Lingrui Pharmaceutical, beginning with the chart below.

Check out our latest analysis for Henan Lingrui Pharmaceutical

What Does The Institutional Ownership Tell Us About Henan Lingrui 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.

As you can see, institutional investors have a fair amount of stake in Henan Lingrui Pharmaceutical. This can indicate that the company has a certain degree of credibility in the investment community. However, it is best to be wary of relying on the supposed validation that comes with institutional investors. They too, get it wrong sometimes. 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 Henan Lingrui Pharmaceutical's earnings history below. Of course, the future is what really matters.

Hedge funds don't have many shares in Henan Lingrui Pharmaceutical. Henan Lingrui Group Co., Ltd. is currently the company's largest shareholder with 22% of shares outstanding. GF Fund Management Co., Ltd. is the second largest shareholder owning 3.4% of common stock, and National Council for Social Security Fund holds about 3.1% of the company stock. Additionally, the company's CEO Wei Xiong directly holds 0.6% of the total shares outstanding.

A deeper look at our ownership data shows that the top 25 shareholders collectively hold less than half of the register, suggesting a large group of small holders where no single shareholder has a majority.

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. There is some analyst coverage of the stock, but it could still become more well known, with time.

Insider Ownership Of Henan Lingrui Pharmaceutical

While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. The company management answer to the board and the latter should represent the interests of shareholders. Notably, sometimes top-level managers are on the board themselves.

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.

We can report that insiders do own shares in Henan Lingrui Pharmaceutical Co., Ltd.. The insiders have a meaningful stake worth CN¥191m. Most would see this as a real positive. Most would say this shows alignment of interests between shareholders and the board. Still, it might be worth checking if those insiders have been selling.

General Public Ownership

The general public, who are usually individual investors, hold a substantial 51% stake in Henan Lingrui Pharmaceutical, suggesting it is a fairly popular stock. With this amount of ownership, retail investors can collectively play a role in decisions that affect shareholder returns, such as dividend policies and the appointment of directors. They can also exercise the power to vote on acquisitions or mergers that may not improve profitability.

Private Company Ownership

We can see that Private Companies own 22%, of the shares on issue. 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.

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. Be aware that Henan Lingrui Pharmaceutical is showing 1 warning sign in our investment analysis , you should know about...

Ultimately the future is most important. You can access this free report on analyst forecasts for the company.

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.