Private companies invested in Jiangsu Jibeier Pharmaceutical Co., Ltd. (SHSE:688566) copped the brunt of last week's CN¥373m market cap decline

Key Insights

• The considerable ownership by private companies in Jiangsu Jibeier Pharmaceutical indicates that they collectively have a greater say in management and business strategy
• 55% of the business is held by the top 4 shareholders
• Insider ownership in Jiangsu Jibeier Pharmaceutical is 20%

If you want to know who really controls Jiangsu Jibeier Pharmaceutical Co., Ltd. (SHSE:688566), 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 35% to be precise, is private companies. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

As market cap fell to CN¥4.5b last week, private companies would have faced the highest losses than any other shareholder groups of the company.

In the chart below, we zoom in on the different ownership groups of Jiangsu Jibeier Pharmaceutical.

View our latest analysis for Jiangsu Jibeier Pharmaceutical

What Does The Institutional Ownership Tell Us About Jiangsu Jibeier 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.

Jiangsu Jibeier Pharmaceutical already has institutions on the share registry. Indeed, they own a respectable stake in the company. This can indicate that the company has a certain degree of credibility in the investment community. However, it is best to be wary of relying on the supposed validation that comes with institutional investors. They too, get it wrong sometimes. 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 Jiangsu Jibeier Pharmaceutical, (below). Of course, keep in mind that there are other factors to consider, too.

Jiangsu Jibeier Pharmaceutical is not owned by hedge funds. Our data shows that Zhenjiang Zhongtian Investment Consulting Co., Ltd. is the largest shareholder with 27% of shares outstanding. Meanwhile, the second and third largest shareholders, hold 13% and 8.2%, of the shares outstanding, respectively. Zhongyi Geng, who is the second-largest shareholder, also happens to hold the title of Chief Executive Officer.

Our research also brought to light the fact that roughly 55% of the company is controlled by the top 4 shareholders suggesting that these owners wield significant influence on the business.

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. While there is some analyst coverage, the company is probably not widely covered. So it could gain more attention, down the track.

Insider Ownership Of Jiangsu Jibeier Pharmaceutical

While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. 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 information suggests that insiders maintain a significant holding in Jiangsu Jibeier Pharmaceutical Co., Ltd.. Insiders own CN¥901m worth of shares in the CN¥4.5b company. We would say this shows alignment with shareholders, but it is worth noting that the company is still quite small; some insiders may have founded the business. You can click here to see if those insiders have been buying or selling.

General Public Ownership

With a 31% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Jiangsu Jibeier 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

Our data indicates that Private Companies hold 35%, 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:

It's always worth thinking about the different groups who own shares in a company. But to understand Jiangsu Jibeier Pharmaceutical better, we need to consider many other factors. Be aware that Jiangsu Jibeier Pharmaceutical is showing 2 warning signs in our investment analysis , you should know about...

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.

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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.