Cisen Pharmaceutical Co., Ltd.'s (SHSE:603367) largest shareholders are private companies who were rewarded as market cap surged CN¥398m last week

Key Insights

• The considerable ownership by private companies in Cisen Pharmaceutical indicates that they collectively have a greater say in management and business strategy
• The top 4 shareholders own 52% of the company
• Insiders own 13% of Cisen Pharmaceutical

To get a sense of who is truly in control of Cisen Pharmaceutical Co., Ltd. (SHSE:603367), it is important to understand the ownership structure of the business. With 43% 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¥5.9b market cap following a 7.3% gain in the stock.

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

Check out our latest analysis for Cisen Pharmaceutical

What Does The Institutional Ownership Tell Us About Cisen Pharmaceutical?

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.

We can see that Cisen Pharmaceutical does have institutional investors; and they hold a good portion of the company's stock. 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. It is not uncommon to see a big share price drop if two large institutional investors try to sell out of a stock at the same time. So it is worth checking the past earnings trajectory of Cisen Pharmaceutical, (below). Of course, keep in mind that there are other factors to consider, too.

Hedge funds don't have many shares in Cisen Pharmaceutical. Our data shows that Cisen Technology Group Co., Ltd. is the largest shareholder with 26% of shares outstanding. The second and third largest shareholders are Yanzhen Han and Sichuan Kelun Industry Group CO., LTD., with an equal amount of shares to their name at 10%.

On looking further, we found that 52% of the shares are owned by the top 4 shareholders. In other words, these shareholders have a meaningful say in the decisions of the company.

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 Cisen Pharmaceutical

The definition of an insider can differ slightly between different countries, but members of the board of directors always count. 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.

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 a reasonable proportion of Cisen Pharmaceutical Co., Ltd.. Insiders own CN¥753m worth of shares in the CN¥5.9b company. This may suggest that the founders still own a lot of shares. You can click here to see if they have been buying or selling.

General Public Ownership

The general public, who are usually individual investors, hold a 32% stake in Cisen Pharmaceutical. This size of ownership, while considerable, may not be enough to change company policy if the decision is not in sync with other large shareholders.

Private Company Ownership

It seems that Private Companies own 43%, of the Cisen Pharmaceutical stock. 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 6.1% of the Cisen Pharmaceutical shares on issue. This may be a strategic interest and the two companies may have related business interests. It could be that they have de-merged. This holding is probably worth investigating further.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand Cisen Pharmaceutical better, we need to consider many other factors. Case in point: We've spotted 2 warning signs for Cisen Pharmaceutical you should be aware of, and 1 of them is significant.

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.