Jiangsu Nhwa Pharmaceutical Co., LTD's (SZSE:002262) largest shareholders are retail investors with 34% ownership, private companies own 32%

Key Insights

• The considerable ownership by retail investors in Jiangsu Nhwa Pharmaceutical indicates that they collectively have a greater say in management and business strategy
• The top 6 shareholders own 51% of the company
• 18% of Jiangsu Nhwa Pharmaceutical is held by insiders

To get a sense of who is truly in control of Jiangsu Nhwa Pharmaceutical Co., LTD (SZSE:002262), it is important to understand the ownership structure of the business. With 34% stake, retail investors 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).

Meanwhile, private companies make up 32% of the company’s shareholders.

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

See our latest analysis for Jiangsu Nhwa Pharmaceutical

What Does The Institutional Ownership Tell Us About Jiangsu Nhwa Pharmaceutical?

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.

Jiangsu Nhwa Pharmaceutical already has institutions on the share registry. Indeed, they own a respectable stake in the company. 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. 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 Jiangsu Nhwa Pharmaceutical's historic earnings and revenue below, but keep in mind there's always more to the story.

Jiangsu Nhwa Pharmaceutical is not owned by hedge funds. Looking at our data, we can see that the largest shareholder is Xuzhou Nhwa Investment Co., Ltd. with 32% of shares outstanding. With 4.9% and 3.9% of the shares outstanding respectively, Pengsheng Sun and Zengliang Chen are the second and third largest shareholders. Zengliang Chen, who is the third-largest shareholder, also happens to hold the title of Member of the Board of Directors.

We also observed that the top 6 shareholders account for more than half of the share register, with a few smaller shareholders to balance the interests of the larger ones to a certain extent.

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. Quite a few analysts cover the stock, so you could look into forecast growth quite easily.

Insider Ownership Of Jiangsu Nhwa Pharmaceutical

The definition of an insider can differ slightly between different countries, but members of the board of directors always count. 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.

Insider ownership is positive when it signals leadership are thinking like the true owners of the company. However, high insider ownership can also give immense power to a small group within the company. This can be negative in some circumstances.

Our most recent data indicates that insiders own a reasonable proportion of Jiangsu Nhwa Pharmaceutical Co., LTD. Insiders own CN¥3.9b worth of shares in the CN¥22b company. That's quite meaningful. Most would say this shows a good degree of alignment with shareholders, especially in a company of this size. 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 34% stake in Jiangsu Nhwa 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 32%, of the Jiangsu Nhwa Pharmaceutical 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:

While it is well worth considering the different groups that own a company, there are other factors that are even more important.

Many find it useful to take an in depth look at how a company has performed in the past. You can access this detailed graph of past earnings, revenue and cash flow.

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.