Shanghai Yizhong Pharmaceutical Co., Ltd.'s (SHSE:688091) market cap dropped CN¥372m last week; Individual investors bore the brunt

Key Insights

• Significant control over Shanghai Yizhong Pharmaceutical by individual investors implies that the general public has more power to influence management and governance-related decisions
• The top 13 shareholders own 50% of the company
• Insiders own 24% of Shanghai Yizhong Pharmaceutical

Every investor in Shanghai Yizhong Pharmaceutical Co., Ltd. (SHSE:688091) should be aware of the most powerful shareholder groups. And the group that holds the biggest piece of the pie are individual investors with 49% ownership. Put another way, the group faces the maximum upside potential (or downside risk).

Following a 6.3% decrease in the stock price last week, individual investors suffered the most losses, but insiders who own 24% stock also took a hit.

In the chart below, we zoom in on the different ownership groups of Shanghai Yizhong Pharmaceutical.

Check out our latest analysis for Shanghai Yizhong Pharmaceutical

What Does The Institutional Ownership Tell Us About Shanghai Yizhong 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.

Less than 5% of Shanghai Yizhong Pharmaceutical is held by institutional investors. This suggests that some funds have the company in their sights, but many have not yet bought shares in it. If the business gets stronger from here, we could see a situation where more institutions are keen to buy. We sometimes see a rising share price when a few big institutions want to buy a certain stock at the same time. The history of earnings and revenue, which you can see below, could be helpful in considering if more institutional investors will want the stock. Of course, there are plenty of other factors to consider, too.

Shanghai Yizhong Pharmaceutical is not owned by hedge funds. Looking at our data, we can see that the largest shareholder is the CEO Jingsong Zhou with 20% of shares outstanding. For context, the second largest shareholder holds about 12% of the shares outstanding, followed by an ownership of 4.7% by the third-largest shareholder.

Looking at the shareholder registry, we can see that 50% of the ownership is controlled by the top 13 shareholders, meaning that no single shareholder has a majority interest in the ownership.

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. Our information suggests that there isn't any analyst coverage of the stock, so it is probably little known.

Insider Ownership Of Shanghai Yizhong 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. Company management run the business, but the CEO will answer to the board, even if he or she is a member of it.

I generally consider insider ownership to be a good thing. However, on some occasions it makes it more difficult for other shareholders to hold the board accountable for decisions.

It seems insiders own a significant proportion of Shanghai Yizhong Pharmaceutical Co., Ltd.. Insiders have a CN¥1.3b stake in this CN¥5.6b business. It is great to see insiders so invested in the business. It might be worth checking if those insiders have been buying recently.

General Public Ownership

With a 49% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Shanghai Yizhong 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

We can see that Private Companies own 12%, of the shares on issue. 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.

Public Company Ownership

We can see that public companies hold 12% of the Shanghai Yizhong Pharmaceutical shares on issue. It's hard to say for sure but this suggests they have entwined business interests. This might be a strategic stake, so it's worth watching this space for changes in ownership.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand Shanghai Yizhong Pharmaceutical better, we need to consider many other factors. For example, we've discovered 2 warning signs for Shanghai Yizhong Pharmaceutical (1 makes us a bit uncomfortable!) that you should be aware of before investing here.

Of course this may not be the best stock to buy. Therefore, you may wish to see our free collection of interesting prospects boasting favorable financials.

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.