Private companies are Youcare Pharmaceutical Group Co., Ltd.'s (SHSE:688658) biggest owners and were hit after market cap dropped CN¥371m

Key Insights

• Significant control over Youcare Pharmaceutical Group by private companies implies that the general public has more power to influence management and governance-related decisions
• A total of 5 investors have a majority stake in the company with 52% ownership
• 22% of Youcare Pharmaceutical Group is held by Institutions

A look at the shareholders of Youcare Pharmaceutical Group Co., Ltd. (SHSE:688658) can tell us which group is most powerful. The group holding the most number of shares in the company, around 43% to be precise, is private companies. Put another way, the group faces the maximum upside potential (or downside risk).

As a result, private companies as a group endured the highest losses last week after market cap fell by CN¥371m.

In the chart below, we zoom in on the different ownership groups of Youcare Pharmaceutical Group.

See our latest analysis for Youcare Pharmaceutical Group

What Does The Institutional Ownership Tell Us About Youcare Pharmaceutical Group?

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.

We can see that Youcare Pharmaceutical Group does have institutional investors; and they hold a good portion of the company's stock. 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 Youcare Pharmaceutical Group's earnings history below. Of course, the future is what really matters.

Youcare Pharmaceutical Group is not owned by hedge funds. The company's largest shareholder is Fuyang Jingyue Yongshun Information Consulting Co., Ltd., with ownership of 40%. With 3.2% and 2.9% of the shares outstanding respectively, Heze Sanrong Equity Investment Partnership Enterprise (Limited Partnership) and Khorgos Defeng Equity Investment Management Partnership Enterprise (Limited Partnership) are the second and third largest shareholders. Additionally, the company's CEO Fei Yu directly holds 2.4% of the total shares outstanding.

Our research also brought to light the fact that roughly 52% of the company is controlled by the top 5 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 Youcare Pharmaceutical Group

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.

We can see that insiders own shares in Youcare Pharmaceutical Group Co., Ltd.. It is a pretty big company, so it is generally a positive to see some potentially meaningful alignment. In this case, they own around CN¥189m worth of shares (at current prices). If you would like to explore the question of insider alignment, you can click here to see if insiders have been buying or selling.

General Public Ownership

The general public, who are usually individual investors, hold a 32% stake in Youcare Pharmaceutical Group. This size of ownership, while considerable, may not be enough to change company policy if the decision is not in sync with other large shareholders.

Private Company Ownership

It seems that Private Companies own 43%, of the Youcare Pharmaceutical Group stock. Private companies may be related parties. Sometimes insiders have an interest in a public company through a holding in a private company, rather than in their own capacity as an individual. While it's hard to draw any broad stroke conclusions, it is worth noting as an area for further research.

Next Steps:

While it is well worth considering the different groups that own a company, there are other factors that are even more important. Be aware that Youcare Pharmaceutical Group is showing 3 warning signs in our investment analysis , and 1 of those is a bit unpleasant...

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.