Insiders were the biggest winners as Chengdu Kanghong Pharmaceutical Group Co., Ltd's (SZSE:002773) market cap grew by CN¥2.2b last week

Key Insights

• Chengdu Kanghong Pharmaceutical Group's significant insider ownership suggests inherent interests in company's expansion
• A total of 2 investors have a majority stake in the company with 54% ownership
• Ownership research, combined with past performance data can help provide a good understanding of opportunities in a stock

A look at the shareholders of Chengdu Kanghong Pharmaceutical Group Co., Ltd (SZSE:002773) can tell us which group is most powerful. With 39% stake, individual insiders possess the maximum shares in the company. Put another way, the group faces the maximum upside potential (or downside risk).

As a result, insiders were the biggest beneficiaries of last week’s 12% gain.

Let's delve deeper into each type of owner of Chengdu Kanghong Pharmaceutical Group, beginning with the chart below.

See our latest analysis for Chengdu Kanghong Pharmaceutical Group

What Does The Institutional Ownership Tell Us About Chengdu Kanghong Pharmaceutical Group?

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.

As you can see, institutional investors have a fair amount of stake in Chengdu Kanghong Pharmaceutical Group. 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. 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 Chengdu Kanghong Pharmaceutical Group's earnings history below. Of course, the future is what really matters.

We note that hedge funds don't have a meaningful investment in Chengdu Kanghong Pharmaceutical Group. Chengdu Kanghong Technology (Group) Co., Ltd. is currently the company's largest shareholder with 32% of shares outstanding. Meanwhile, the second and third largest shareholders, hold 23% and 8.7%, of the shares outstanding, respectively. Xiao Ke, who is the third-largest shareholder, also happens to hold the title of Member of the Board of Directors.

To make our study more interesting, we found that the top 2 shareholders have a majority ownership in the company, meaning that they are powerful enough to influence the decisions of the company.

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. There is some analyst coverage of the stock, but it could still become more well known, with time.

Insider Ownership Of Chengdu Kanghong Pharmaceutical Group

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.

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 Chengdu Kanghong Pharmaceutical Group Co., Ltd. It is very interesting to see that insiders have a meaningful CN¥7.7b stake in this CN¥20b business. It is good to see this level of investment. You can check here to see if those insiders have been buying recently.

General Public Ownership

The general public, who are usually individual investors, hold a 23% stake in Chengdu Kanghong Pharmaceutical Group. While this size of ownership may not be enough to sway a policy decision in their favour, they can still make a collective impact on company policies.

Private Company Ownership

It seems that Private Companies own 32%, of the Chengdu Kanghong Pharmaceutical Group 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:

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. Case in point: We've spotted 1 warning sign for Chengdu Kanghong Pharmaceutical Group you should be aware of.

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.