Private companies invested in Zhejiang Haisen Pharmaceutical Co., Ltd. (SZSE:001367) up 13% last week, insiders too were rewarded

Key Insights

• The considerable ownership by private companies in Zhejiang Haisen Pharmaceutical indicates that they collectively have a greater say in management and business strategy
• The top 2 shareholders own 57% of the company
• 31% of Zhejiang Haisen Pharmaceutical is held by insiders

If you want to know who really controls Zhejiang Haisen Pharmaceutical Co., Ltd. (SZSE:001367), 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 44% to be precise, is private companies. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

Following a 13% increase in the stock price last week, private companies profited the most, but insiders who own 31% stock also stood to gain from the increase.

Let's take a closer look to see what the different types of shareholders can tell us about Zhejiang Haisen Pharmaceutical.

View our latest analysis for Zhejiang Haisen Pharmaceutical

What Does The Institutional Ownership Tell Us About Zhejiang Haisen Pharmaceutical?

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.

Since institutions own only a small portion of Zhejiang Haisen Pharmaceutical, many may not have spent much time considering the stock. But it's clear that some have; and they liked it enough to buy in. If the business gets stronger from here, we could see a situation where more institutions are keen to buy. It is not uncommon to see a big share price rise if multiple institutional investors are trying to buy into a stock at the same time. So check out the historic earnings trajectory, below, but keep in mind it's the future that counts most.

Zhejiang Haisen Pharmaceutical is not owned by hedge funds. Zhejiang Haisen Holding Co., Ltd. is currently the largest shareholder, with 33% of shares outstanding. Meanwhile, the second and third largest shareholders, hold 25% and 11%, of the shares outstanding, respectively. Additionally, the company's CEO Lin Ai directly holds 4.0% of the total shares outstanding.

A more detailed study of the shareholder registry showed us that 2 of the top shareholders have a considerable amount of ownership in the company, via their 57% stake.

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. Our information suggests that there isn't any analyst coverage of the stock, so it is probably little known.

Insider Ownership Of Zhejiang Haisen Pharmaceutical

The definition of company insiders can be subjective and does vary between jurisdictions. Our data reflects individual insiders, capturing board members at the very least. 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 most recent data indicates that insiders own a reasonable proportion of Zhejiang Haisen Pharmaceutical Co., Ltd.. It has a market capitalization of just CN¥2.5b, and insiders have CN¥771m worth of shares in their own names. 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

The general public, who are usually individual investors, hold a 23% stake in Zhejiang Haisen 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

It seems that Private Companies own 44%, of the Zhejiang Haisen Pharmaceutical 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. Consider risks, for instance. Every company has them, and we've spotted 1 warning sign for Zhejiang Haisen Pharmaceutical you should know about.

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com