Guizhou Bailing Group Pharmaceutical Co., Ltd. (SZSE:002424) surges 9.8%; individual investors who own 56% shares profited along with institutions

Key Insights

• Significant control over Guizhou Bailing Group Pharmaceutical by individual investors implies that the general public has more power to influence management and governance-related decisions
• The top 25 shareholders own 44% of the company
• Insiders own 18% of Guizhou Bailing Group Pharmaceutical

To get a sense of who is truly in control of Guizhou Bailing Group Pharmaceutical Co., Ltd. (SZSE:002424), it is important to understand the ownership structure of the business. The group holding the most number of shares in the company, around 56% to be precise, is individual investors. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

Following a 9.8% increase in the stock price last week, individual investors profited the most, but institutions who own 23% 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 Guizhou Bailing Group Pharmaceutical.

Check out our latest analysis for Guizhou Bailing Group Pharmaceutical

What Does The Institutional Ownership Tell Us About Guizhou Bailing Group 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.

Guizhou Bailing Group Pharmaceutical already has institutions on the share registry. Indeed, they own a respectable stake in the company. 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. It is not uncommon to see a big share price drop if two large institutional investors try to sell out of a stock at the same time. So it is worth checking the past earnings trajectory of Guizhou Bailing Group Pharmaceutical, (below). Of course, keep in mind that there are other factors to consider, too.

We note that hedge funds don't have a meaningful investment in Guizhou Bailing Group Pharmaceutical. Looking at our data, we can see that the largest shareholder is Wei Jiang with 18% of shares outstanding. Meanwhile, the second and third largest shareholders, hold 12% and 2.3%, of the shares outstanding, respectively.

A deeper look at our ownership data shows that the top 25 shareholders collectively hold less than half of the register, suggesting a large group of small holders where no single shareholder has a majority.

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. We're not picking up on any analyst coverage of the stock at the moment, so the company is unlikely to be widely held.

Insider Ownership Of Guizhou Bailing Group Pharmaceutical

While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. 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 Guizhou Bailing Group Pharmaceutical Co., Ltd.. It has a market capitalization of just CN¥4.9b, and insiders have CN¥883m worth of shares in their own names. It is great to see insiders so invested in the business. It might be worth checking if those insiders have been buying recently.

General Public Ownership

The general public -- including retail investors -- own 56% of Guizhou Bailing Group Pharmaceutical. This size of ownership gives investors from the general public some collective power. They can and probably do influence decisions on executive compensation, dividend policies and proposed business acquisitions.

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. Be aware that Guizhou Bailing Group Pharmaceutical is showing 2 warning signs in our investment analysis , you should know about...

Of course this may not be the best stock to buy. Therefore, you may wish to see our free collection of interesting prospects boasting favorable financials.

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.