Retail investors who hold 49% of Changzhou Qianhong Biopharma CO.,LTD (SZSE:002550) gained 6.2%, insiders profited as well

Key Insights

• Significant control over Changzhou Qianhong BiopharmaLTD by retail investors implies that the general public has more power to influence management and governance-related decisions
• The top 19 shareholders own 50% of the company
• Insider ownership in Changzhou Qianhong BiopharmaLTD is 43%

If you want to know who really controls Changzhou Qianhong Biopharma CO.,LTD (SZSE:002550), then you'll have to look at the makeup of its share registry. With 49% 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).

Following a 6.2% increase in the stock price last week, retail investors profited the most, but insiders who own 43% stock also stood to gain from the increase.

In the chart below, we zoom in on the different ownership groups of Changzhou Qianhong BiopharmaLTD.

Check out our latest analysis for Changzhou Qianhong BiopharmaLTD

What Does The Institutional Ownership Tell Us About Changzhou Qianhong BiopharmaLTD?

Institutions typically measure themselves against a benchmark when reporting to their own investors, so they often become more enthusiastic about a stock once it's included in a major index. We would expect most companies to have some institutions on the register, especially if they are growing.

As you can see, institutional investors have a fair amount of stake in Changzhou Qianhong BiopharmaLTD. This can indicate that the company has a certain degree of credibility in the investment community. However, it is best to be wary of relying on the supposed validation that comes with institutional investors. They too, get it wrong sometimes. 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 Changzhou Qianhong BiopharmaLTD's historic earnings and revenue below, but keep in mind there's always more to the story.

We note that hedge funds don't have a meaningful investment in Changzhou Qianhong BiopharmaLTD. Our data shows that Yaofang Wang is the largest shareholder with 20% of shares outstanding. For context, the second largest shareholder holds about 7.9% of the shares outstanding, followed by an ownership of 5.1% by the third-largest shareholder. Ke Wang, who is the third-largest shareholder, also happens to hold the title of Member of the Board of Directors.

A closer look at our ownership figures suggests that the top 19 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. There is a little analyst coverage of the stock, but not much. So there is room for it to gain more coverage.

Insider Ownership Of Changzhou Qianhong BiopharmaLTD

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.

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.

It seems insiders own a significant proportion of Changzhou Qianhong Biopharma CO.,LTD. Insiders own CN¥2.8b worth of shares in the CN¥6.6b company. 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

With a 49% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Changzhou Qianhong BiopharmaLTD. 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.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand Changzhou Qianhong BiopharmaLTD better, we need to consider many other factors. For instance, we've identified 1 warning sign for Changzhou Qianhong BiopharmaLTD that you should be aware of.

But ultimately it is the future, not the past, that will determine how well the owners of this business will do. Therefore we think it advisable to take a look at this free report showing whether analysts are predicting a brighter 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.