Private companies are Shanghai Shyndec Pharmaceutical Co., Ltd.'s (SHSE:600420) biggest owners and were rewarded after market cap rose by CN¥1.3b last week

Key Insights

• The considerable ownership by private companies in Shanghai Shyndec Pharmaceutical indicates that they collectively have a greater say in management and business strategy
• 56% of the company is held by a single shareholder (China National Pharmaceutical Group Corporation)
• Past performance of a company along with ownership data serve to give a strong idea about prospects for a business

Every investor in Shanghai Shyndec Pharmaceutical Co., Ltd. (SHSE:600420) should be aware of the most powerful shareholder groups. With 59% stake, private companies 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 a result, private companies collectively scored the highest last week as the company hit CN¥17b market cap following a 8.3% gain in the stock.

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

View our latest analysis for Shanghai Shyndec Pharmaceutical

What Does The Institutional Ownership Tell Us About Shanghai Shyndec 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 Shanghai Shyndec Pharmaceutical does have institutional investors; and they hold a good portion of the company's stock. 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 Shanghai Shyndec Pharmaceutical's earnings history below. Of course, the future is what really matters.

Hedge funds don't have many shares in Shanghai Shyndec Pharmaceutical. China National Pharmaceutical Group Corporation is currently the company's largest shareholder with 56% of shares outstanding. This essentially means that they have extensive influence, if not outright control, over the future of the corporation. With 2.2% and 1.3% of the shares outstanding respectively, E Fund Management Co., Ltd. and Yanlin Han are the second and third largest 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. While there is some analyst coverage, the company is probably not widely covered. So it could gain more attention, down the track.

Insider Ownership Of Shanghai Shyndec 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.

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.

Our most recent data indicates that insiders own some shares in Shanghai Shyndec Pharmaceutical Co., Ltd.. This is a big company, so it is good to see this level of alignment. Insiders own CN¥221m worth of shares (at current prices). It is good to see this level of investment by insiders. 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 34% stake in Shanghai Shyndec Pharmaceutical. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.

Private Company Ownership

Our data indicates that Private Companies hold 59%, of the company's shares. 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:

It's always worth thinking about the different groups who own shares in a company. But to understand Shanghai Shyndec Pharmaceutical better, we need to consider many other factors. To that end, you should be aware of the 1 warning sign we've spotted with Shanghai Shyndec Pharmaceutical .

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.

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