Private companies invested in Pacific Shuanglin Bio-pharmacy Co., LTD (SZSE:000403) copped the brunt of last week's CN¥526m market cap decline

Key Insights

• Significant control over Pacific Shuanglin Bio-pharmacy by private companies implies that the general public has more power to influence management and governance-related decisions
• The top 11 shareholders own 51% of the company
• Institutions own 28% of Pacific Shuanglin Bio-pharmacy

If you want to know who really controls Pacific Shuanglin Bio-pharmacy Co., LTD (SZSE:000403), then you'll have to look at the makeup of its share registry. And the group that holds the biggest piece of the pie are private companies with 37% ownership. Put another way, the group faces the maximum upside potential (or downside risk).

And following last week's 3.4% decline in share price, private companies suffered the most losses.

In the chart below, we zoom in on the different ownership groups of Pacific Shuanglin Bio-pharmacy.

See our latest analysis for Pacific Shuanglin Bio-pharmacy

What Does The Institutional Ownership Tell Us About Pacific Shuanglin Bio-pharmacy?

Many institutions measure their performance against an index that approximates the local market. So they usually pay more attention to companies that are included in major indices.

We can see that Pacific Shuanglin Bio-pharmacy does have institutional investors; and they hold a good portion of the company's stock. This implies the analysts working for those institutions have looked at the stock and they like it. But just like anyone else, they could be wrong. When multiple institutions own a stock, there's always a risk that they are in a 'crowded trade'. When such a trade goes wrong, multiple parties may compete to sell stock fast. This risk is higher in a company without a history of growth. You can see Pacific Shuanglin Bio-pharmacy's historic earnings and revenue below, but keep in mind there's always more to the story.

Pacific Shuanglin Bio-pharmacy is not owned by hedge funds. Looking at our data, we can see that the largest shareholder is Gongqingcheng Shengbang Yinghao Investment Partnership Enterprise (Limited Partnership) with 21% of shares outstanding. Harbin Tongzhicheng Technology Development Co., Ltd. is the second largest shareholder owning 11% of common stock, and Kaisa Group Holdings Ltd. holds about 4.5% of the company stock.

Looking at the shareholder registry, we can see that 51% of the ownership is controlled by the top 11 shareholders, meaning that no single shareholder has a majority interest in the ownership.

Researching institutional ownership is a good way to gauge and filter a stock's expected performance. The same can be achieved by studying analyst sentiments. There are plenty of analysts covering the stock, so it might be worth seeing what they are forecasting, too.

Insider Ownership Of Pacific Shuanglin Bio-pharmacy

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.

Our most recent data indicates that insiders own some shares in Pacific Shuanglin Bio-pharmacy 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¥492m worth of shares (at current prices). It is good to see this level of investment by insiders. You can check here to see if those insiders have been buying recently.

General Public Ownership

The general public, who are usually individual investors, hold a 28% stake in Pacific Shuanglin Bio-pharmacy. 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

We can see that Private Companies own 37%, 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

Public companies currently own 4.5% of Pacific Shuanglin Bio-pharmacy stock. 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:

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. Consider for instance, the ever-present spectre of investment risk. We've identified 1 warning sign with Pacific Shuanglin Bio-pharmacy , and understanding them should be part of your investment process.

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.