Retail investors are Sichuan Kelun Pharmaceutical Co., Ltd.'s (SZSE:002422) biggest owners and were hit after market cap dropped CN¥2.3b

Key Insights

• Significant control over Sichuan Kelun Pharmaceutical by retail investors implies that the general public has more power to influence management and governance-related decisions
• The top 22 shareholders own 50% of the company
• Insider ownership in Sichuan Kelun Pharmaceutical is 27%

Every investor in Sichuan Kelun Pharmaceutical Co., Ltd. (SZSE:002422) should be aware of the most powerful shareholder groups. We can see that retail investors own the lion's share in the company with 40% ownership. Put another way, the group faces the maximum upside potential (or downside risk).

While insiders who own 27% came under pressure after market cap dropped to CN¥46b last week,retail investors took the most losses.

Let's delve deeper into each type of owner of Sichuan Kelun Pharmaceutical, beginning with the chart below.

Check out our latest analysis for Sichuan Kelun Pharmaceutical

What Does The Institutional Ownership Tell Us About Sichuan Kelun 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.

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

Hedge funds don't have many shares in Sichuan Kelun Pharmaceutical. Gexin Liu is currently the company's largest shareholder with 24% of shares outstanding. Ya'an Development Investment Company Limited is the second largest shareholder owning 5.9% of common stock, and Hong Kong Exchanges & Clearing Limited, Asset Management Arm holds about 5.2% of the company stock. Furthermore, CEO Sichuan Liu is the owner of 0.5% of the company's shares.

A closer look at our ownership figures suggests that the top 22 shareholders have a combined ownership of 50% implying that no single shareholder has a majority.

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 Sichuan Kelun 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. 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.

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 Sichuan Kelun Pharmaceutical Co., Ltd.. It is very interesting to see that insiders have a meaningful CN¥12b stake in this CN¥46b business. Most would be pleased to see the board is investing alongside them. You may wish to access this free chart showing recent trading by insiders.

General Public Ownership

With a 40% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Sichuan Kelun Pharmaceutical. 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 5.9%, 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.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand Sichuan Kelun Pharmaceutical better, we need to consider many other factors. To that end, you should be aware of the 2 warning signs we've spotted with Sichuan Kelun Pharmaceutical .

If you would prefer discover what analysts are predicting in terms of future growth, do not miss this free report on analyst forecasts.

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.