Shanghai Allist Pharmaceuticals Co., Ltd.'s (SHSE:688578) market cap dropped CN¥1.3b last week; Private companies bore the brunt

Key Insights

• Shanghai Allist Pharmaceuticals' significant private companies ownership suggests that the key decisions are influenced by shareholders from the larger public
• 51% of the business is held by the top 4 shareholders
• 21% of Shanghai Allist Pharmaceuticals is held by Institutions

A look at the shareholders of Shanghai Allist Pharmaceuticals Co., Ltd. (SHSE:688578) can tell us which group is most powerful. With 44% stake, private companies possess the maximum shares in the company. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

And last week, private companies endured the biggest losses as the stock fell by 4.9%.

Let's take a closer look to see what the different types of shareholders can tell us about Shanghai Allist Pharmaceuticals.

View our latest analysis for Shanghai Allist Pharmaceuticals

What Does The Institutional Ownership Tell Us About Shanghai Allist Pharmaceuticals?

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.

Shanghai Allist Pharmaceuticals 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. 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 Shanghai Allist Pharmaceuticals' earnings history below. Of course, the future is what really matters.

We note that hedge funds don't have a meaningful investment in Shanghai Allist Pharmaceuticals. Our data shows that Shanghai Qiaoke Enterprise Development Co., Ltd. is the largest shareholder with 32% of shares outstanding. Meanwhile, the second and third largest shareholders, hold 8.1% and 5.7%, of the shares outstanding, respectively. Guo Yang, who is the third-largest shareholder, also happens to hold the title of Member of the Board of Directors. Furthermore, CEO Jinhao Du is the owner of 2.4% of the company's shares.

Our research also brought to light the fact that roughly 51% 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 Shanghai Allist Pharmaceuticals

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.

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.

We can report that insiders do own shares in Shanghai Allist Pharmaceuticals Co., Ltd.. The insiders have a meaningful stake worth CN¥2.1b. Most would see this as a real positive. Most would say this shows alignment of interests between shareholders and the board. Still, it might be worth checking if those insiders have been selling.

General Public Ownership

The general public-- including retail investors -- own 26% stake in the company, and hence can't easily be ignored. 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 44%, 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.

Next Steps:

I find it very interesting to look at who exactly owns a company. But to truly gain insight, we need to consider other information, too.

I always like to check for a history of revenue growth. You can too, by accessing this free chart of historic revenue and earnings in this detailed graph.

If you are like me, you may want to think about whether this company will grow or shrink. Luckily, you can check this free report showing analyst forecasts for its 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.