Retail investors are North China Pharmaceutical Company.Ltd's (SHSE:600812) biggest owners and were hit after market cap dropped CN¥412m

Key Insights

• North China Pharmaceutical Company.Ltd's significant retail investors ownership suggests that the key decisions are influenced by shareholders from the larger public
• A total of 3 investors have a majority stake in the company with 55% ownership
• Institutions own 12% of North China Pharmaceutical Company.Ltd

A look at the shareholders of North China Pharmaceutical Company.Ltd (SHSE:600812) can tell us which group is most powerful. We can see that retail investors own the lion's share in the company with 33% ownership. 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 4.6% decline in share price, retail investors suffered the most losses.

Let's take a closer look to see what the different types of shareholders can tell us about North China Pharmaceutical Company.Ltd.

See our latest analysis for North China Pharmaceutical Company.Ltd

What Does The Institutional Ownership Tell Us About North China Pharmaceutical Company.Ltd?

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.

As you can see, institutional investors have a fair amount of stake in North China Pharmaceutical Company.Ltd. This implies the analysts working for those institutions have looked at the stock and they like it. But just like anyone else, they could be wrong. 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 North China Pharmaceutical Company.Ltd's earnings history below. Of course, the future is what really matters.

We note that hedge funds don't have a meaningful investment in North China Pharmaceutical Company.Ltd. Looking at our data, we can see that the largest shareholder is Jizhong Energy Resources Co., Ltd. with 24% of shares outstanding. Hebei Jinniu Energy Group Co., Ltd. is the second largest shareholder owning 20% of common stock, and Jizhong Energy Group Co.,Ltd. holds about 11% of the company stock.

After doing some more digging, we found that the top 3 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. Our information suggests that there isn't any analyst coverage of the stock, so it is probably little known.

Insider Ownership Of North China Pharmaceutical Company.Ltd

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.

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.

Our most recent data indicates that insiders own less than 1% of North China Pharmaceutical Company.Ltd. But they may have an indirect interest through a corporate structure that we haven't picked up on. Keep in mind that it's a big company, and the insiders own CN¥21k worth of shares. The absolute value might be more important than the proportional share. It is good to see board members owning shares, but it might be worth checking if those insiders have been buying.

General Public Ownership

The general public-- including retail investors -- own 33% 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

We can see that Private Companies own 31%, 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.

Public Company Ownership

We can see that public companies hold 24% of the North China Pharmaceutical Company.Ltd shares on issue. We can't be certain but it is quite possible this is a strategic stake. The businesses may be similar, or work together.

Next Steps:

While it is well worth considering the different groups that own a company, there are other factors that are even more important. For instance, we've identified 2 warning signs for North China Pharmaceutical Company.Ltd (1 shouldn't be ignored) 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.