Sailong Pharmaceutical Group Co.,Ltd. (SZSE:002898) insiders, who hold 57% of the firm would be disappointed by the recent pullback

Key Insights

• Insiders appear to have a vested interest in Sailong Pharmaceutical GroupLtd's growth, as seen by their sizeable ownership
• Nan Gui Cai owns 51% of the company
• Ownership research, combined with past performance data can help provide a good understanding of opportunities in a stock

If you want to know who really controls Sailong Pharmaceutical Group Co.,Ltd. (SZSE:002898), then you'll have to look at the makeup of its share registry. With 57% stake, individual insiders possess the maximum shares in the company. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

As market cap fell to CN¥1.5b last week, insiders would have faced the highest losses than any other shareholder groups of the company.

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

View our latest analysis for Sailong Pharmaceutical GroupLtd

What Does The Institutional Ownership Tell Us About Sailong Pharmaceutical GroupLtd?

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.

As you can see, institutional investors have a fair amount of stake in Sailong Pharmaceutical GroupLtd. 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 Sailong Pharmaceutical GroupLtd's historic earnings and revenue below, but keep in mind there's always more to the story.

Sailong Pharmaceutical GroupLtd is not owned by hedge funds. Nan Gui Cai is currently the company's largest shareholder with 51% of shares outstanding. This implies that they have majority interest control of the future of the company. For context, the second largest shareholder holds about 8.2% of the shares outstanding, followed by an ownership of 5.5% by the third-largest shareholder. Lin Tang, who is the third-largest shareholder, also happens to hold the title of Member of the Board of Directors.

While studying institutional ownership for a company can add value to your research, it is also a good practice to research analyst recommendations to get a deeper understand of a stock's expected performance. As far as we can tell there isn't analyst coverage of the company, so it is probably flying under the radar.

Insider Ownership Of Sailong Pharmaceutical GroupLtd

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. Company management run the business, but the CEO will answer to the board, even if he or she is a member of it.

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 information suggests that insiders own more than half of Sailong Pharmaceutical Group Co.,Ltd.. This gives them effective control of the company. So they have a CN¥836m stake in this CN¥1.5b 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

With a 29% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Sailong Pharmaceutical GroupLtd. 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

We can see that Private Companies own 9.0%, of the shares on issue. 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:

It's always worth thinking about the different groups who own shares in a company. But to understand Sailong Pharmaceutical GroupLtd better, we need to consider many other factors. For example, we've discovered 2 warning signs for Sailong Pharmaceutical GroupLtd (1 is a bit concerning!) that you should be aware of before investing here.

Of course this may not be the best stock to buy. So take a peek at this free free list of interesting companies.

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.