Nanjing King-Friend Biochemical Pharmaceutical Co.,Ltd.'s (SHSE:603707) market cap increased by CN¥1.4b, insiders receive a 51% cut

Key Insights

• Nanjing King-Friend Biochemical PharmaceuticalLtd's significant insider ownership suggests inherent interests in company's expansion
• 68% of the business is held by the top 3 shareholders
• Institutions own 12% of Nanjing King-Friend Biochemical PharmaceuticalLtd

If you want to know who really controls Nanjing King-Friend Biochemical Pharmaceutical Co.,Ltd. (SHSE:603707), then you'll have to look at the makeup of its share registry. The group holding the most number of shares in the company, around 51% to be precise, is individual insiders. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

As a result, insiders were the biggest beneficiaries of last week’s 6.3% gain.

Let's take a closer look to see what the different types of shareholders can tell us about Nanjing King-Friend Biochemical PharmaceuticalLtd.

Check out our latest analysis for Nanjing King-Friend Biochemical PharmaceuticalLtd

What Does The Institutional Ownership Tell Us About Nanjing King-Friend Biochemical PharmaceuticalLtd?

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.

Nanjing King-Friend Biochemical PharmaceuticalLtd already has institutions on the share registry. Indeed, they own a respectable stake in the company. 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. When multiple institutions own a stock, there's always a risk that they are in a 'crowded trade'. When such a trade goes wrong, multiple parties may compete to sell stock fast. This risk is higher in a company without a history of growth. You can see Nanjing King-Friend Biochemical PharmaceuticalLtd's historic earnings and revenue below, but keep in mind there's always more to the story.

Nanjing King-Friend Biochemical PharmaceuticalLtd is not owned by hedge funds. Our data shows that Ju Hua Xie is the largest shareholder with 27% of shares outstanding. Jiangsu Coast Development Group Co.,Ltd is the second largest shareholder owning 21% of common stock, and Yongqun Tang holds about 20% of the company stock.

A more detailed study of the shareholder registry showed us that 3 of the top shareholders have a considerable amount of ownership in the company, via their 68% stake.

Researching institutional ownership is a good way to gauge and filter a stock's expected performance. The same can be achieved by studying analyst sentiments. Quite a few analysts cover the stock, so you could look into forecast growth quite easily.

Insider Ownership Of Nanjing King-Friend Biochemical PharmaceuticalLtd

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.

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.

It seems that insiders own more than half the Nanjing King-Friend Biochemical Pharmaceutical Co.,Ltd. stock. This gives them a lot of power. That means insiders have a very meaningful CN¥12b stake in this CN¥23b business. It is good to see this level of investment. You can check here to see if those insiders have been selling any of their shares.

General Public Ownership

With a 16% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Nanjing King-Friend Biochemical PharmaceuticalLtd. 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 21%, of the company's shares. It's hard to draw any conclusions from this fact alone, so its worth looking into who owns those private companies. Sometimes insiders or other related parties have an interest in shares in a public company through a separate private company.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand Nanjing King-Friend Biochemical PharmaceuticalLtd better, we need to consider many other factors. For instance, we've identified 1 warning sign for Nanjing King-Friend Biochemical PharmaceuticalLtd that you should be aware of.

But ultimately it is the future, not the past, that will determine how well the owners of this business will do. Therefore we think it advisable to take a look at this free report showing whether analysts are predicting a brighter future.

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.

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

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.