Zhangzhou Pientzehuang Pharmaceutical., Ltd's (SHSE:600436) last week's 4.2% decline must have disappointed private companies who have a significant stake

Key Insights

• The considerable ownership by private companies in Zhangzhou Pientzehuang Pharmaceutical indicates that they collectively have a greater say in management and business strategy
• The largest shareholder of the company is Zhang Zhou Jiu Long Jiang Group Co.,Ltd. with a 55% stake
• Ownership research along with analyst forecasts data help provide a good understanding of opportunities in a stock

Every investor in Zhangzhou Pientzehuang Pharmaceutical., Ltd (SHSE:600436) should be aware of the most powerful shareholder groups. With 57% 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.

And following last week's 4.2% decline in share price, private companies suffered the most losses.

In the chart below, we zoom in on the different ownership groups of Zhangzhou Pientzehuang Pharmaceutical.

View our latest analysis for Zhangzhou Pientzehuang Pharmaceutical

What Does The Institutional Ownership Tell Us About Zhangzhou Pientzehuang Pharmaceutical?

Institutions typically measure themselves against a benchmark when reporting to their own investors, so they often become more enthusiastic about a stock once it's included in a major index. We would expect most companies to have some institutions on the register, especially if they are growing.

As you can see, institutional investors have a fair amount of stake in Zhangzhou Pientzehuang Pharmaceutical. 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 Zhangzhou Pientzehuang Pharmaceutical's earnings history below. Of course, the future is what really matters.

Hedge funds don't have many shares in Zhangzhou Pientzehuang Pharmaceutical. Zhang Zhou Jiu Long Jiang Group Co.,Ltd. is currently the largest shareholder, with 55% of shares outstanding. This essentially means that they have extensive influence, if not outright control, over the future of the corporation. Fuji Wang is the second largest shareholder owning 4.5% of common stock, and China Securities Finance Corp, Asset Management Arm holds about 1.9% of the company stock.

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 are plenty of analysts covering the stock, so it might be worth seeing what they are forecasting, too.

Insider Ownership Of Zhangzhou Pientzehuang Pharmaceutical

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. 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.

Shareholders would probably be interested to learn that insiders own shares in Zhangzhou Pientzehuang Pharmaceutical., Ltd. Insiders own CN¥5.8b worth of shares (at current prices). Most would say this shows a good alignment of interests between shareholders and the board. Still, it might be worth checking if those insiders have been selling.

General Public Ownership

With a 29% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Zhangzhou Pientzehuang 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 Company Ownership

Our data indicates that Private Companies hold 57%, of the company's shares. 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.

I like to dive deeper into how a company has performed in the past. You can find historic revenue and earnings in this detailed graph.

If you would prefer discover what analysts are predicting in terms of future growth, do not miss this free report on analyst forecasts.

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