Private companies among Chongqing Pharscin Pharmaceutical Co., Ltd.'s (SZSE:002907) largest stockholders and were hit after last week's 7.5% price drop

Key Insights

• Significant control over Chongqing Pharscin Pharmaceutical by private companies implies that the general public has more power to influence management and governance-related decisions
• The top 2 shareholders own 62% of the company
• Insiders own 35% of Chongqing Pharscin Pharmaceutical

Every investor in Chongqing Pharscin Pharmaceutical Co., Ltd. (SZSE:002907) should be aware of the most powerful shareholder groups. We can see that private companies own the lion's share in the company with 45% ownership. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

While the holdings of private companies took a hit after last week’s 7.5% price drop, insiders with their 35% also suffered.

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

Check out our latest analysis for Chongqing Pharscin Pharmaceutical

What Does The Institutional Ownership Tell Us About Chongqing Pharscin 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.

Less than 5% of Chongqing Pharscin Pharmaceutical is held by institutional investors. This suggests that some funds have the company in their sights, but many have not yet bought shares in it. If the company is growing earnings, that may indicate that it is just beginning to catch the attention of these deep-pocketed investors. We sometimes see a rising share price when a few big institutions want to buy a certain stock at the same time. The history of earnings and revenue, which you can see below, could be helpful in considering if more institutional investors will want the stock. Of course, there are plenty of other factors to consider, too.

We note that hedge funds don't have a meaningful investment in Chongqing Pharscin Pharmaceutical. Our data shows that Zhuhai Weilinsi New Material Development Co., Ltd. is the largest shareholder with 45% of shares outstanding. In comparison, the second and third largest shareholders hold about 17% and 8.8% of the stock. Ying Wang, who is the third-largest shareholder, also happens to hold the title of Member of the Board of Directors. Additionally, the company's CEO Xiaoying Liu directly holds 8.6% of the total shares outstanding.

After doing some more digging, we found that the top 2 shareholders collectively control more than half of the company's shares, implying that they have considerable power to influence the company's decisions.

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. 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 Chongqing Pharscin Pharmaceutical

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.

Most consider insider ownership a positive because it can indicate the board is well aligned with other shareholders. However, on some occasions too much power is concentrated within this group.

Our information suggests that insiders maintain a significant holding in Chongqing Pharscin Pharmaceutical Co., Ltd.. Insiders own CN¥1.9b worth of shares in the CN¥5.3b company. This may suggest that the founders still own a lot of shares. You can click here to see if they have been buying or selling.

General Public Ownership

The general public-- including retail investors -- own 17% stake in the company, and hence can't easily be ignored. 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

It seems that Private Companies own 45%, of the Chongqing Pharscin Pharmaceutical stock. 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:

While it is well worth considering the different groups that own a company, there are other factors that are even more important. To that end, you should learn about the 2 warning signs we've spotted with Chongqing Pharscin Pharmaceutical (including 1 which can't be ignored) .

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.