Recent 10% pullback would hurt Beijing Sun-Novo Pharmaceutical Research Co., Ltd. (SHSE:688621) insiders

Key Insights

• Beijing Sun-Novo Pharmaceutical Research's significant insider ownership suggests inherent interests in company's expansion
• The top 8 shareholders own 51% of the company
• 27% of Beijing Sun-Novo Pharmaceutical Research is held by Institutions

Every investor in Beijing Sun-Novo Pharmaceutical Research Co., Ltd. (SHSE:688621) should be aware of the most powerful shareholder groups. And the group that holds the biggest piece of the pie are individual insiders with 37% ownership. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

As a result, insiders as a group endured the highest losses after market cap fell by CN¥476m.

Let's take a closer look to see what the different types of shareholders can tell us about Beijing Sun-Novo Pharmaceutical Research.

See our latest analysis for Beijing Sun-Novo Pharmaceutical Research

What Does The Institutional Ownership Tell Us About Beijing Sun-Novo Pharmaceutical Research?

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.

As you can see, institutional investors have a fair amount of stake in Beijing Sun-Novo Pharmaceutical Research. 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. 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 Beijing Sun-Novo Pharmaceutical Research's earnings history below. Of course, the future is what really matters.

Hedge funds don't have many shares in Beijing Sun-Novo Pharmaceutical Research. Looking at our data, we can see that the largest shareholder is Chen Li with 28% of shares outstanding. With 4.5% and 4.1% of the shares outstanding respectively, Fullgoal Fund Management Co. Ltd. and Yujing Liu are the second and third largest shareholders. Yujing Liu, who is the third-largest shareholder, also happens to hold the title of Member of the Board of Directors.

On further inspection, we found that more than half the company's shares are owned by the top 8 shareholders, suggesting that the interests of the larger shareholders are balanced out to an extent by the smaller ones.

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. There is a little analyst coverage of the stock, but not much. So there is room for it to gain more coverage.

Insider Ownership Of Beijing Sun-Novo Pharmaceutical Research

While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. Management ultimately answers to the board. However, it is not uncommon for managers to be executive board members, especially if they are a founder or the CEO.

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.

Our information suggests that insiders maintain a significant holding in Beijing Sun-Novo Pharmaceutical Research Co., Ltd.. Insiders own CN¥1.6b worth of shares in the CN¥4.3b company. 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

The general public-- including retail investors -- own 31% 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

It seems that Private Companies own 4.7%, of the Beijing Sun-Novo Pharmaceutical Research 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.

Next Steps:

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

Ultimately the future is most important. You can access this free report on analyst forecasts for the company.

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.