Chongqing Zhifei Biological Products Co., Ltd.'s (SZSE:300122) most bullish insider, CEO Rensheng Jiang must be pleased with the recent 5.5% gain

Key Insights

• Chongqing Zhifei Biological Products' significant insider ownership suggests inherent interests in company's expansion
• The top 2 shareholders own 54% of the company
• 15% of Chongqing Zhifei Biological Products is held by Institutions

To get a sense of who is truly in control of Chongqing Zhifei Biological Products Co., Ltd. (SZSE:300122), it is important to understand the ownership structure of the business. With 59% 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 a result, insiders were the biggest beneficiaries of last week’s 5.5% gain.

In the chart below, we zoom in on the different ownership groups of Chongqing Zhifei Biological Products.

See our latest analysis for Chongqing Zhifei Biological Products

What Does The Institutional Ownership Tell Us About Chongqing Zhifei Biological Products?

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 Chongqing Zhifei Biological Products. 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. 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 Chongqing Zhifei Biological Products' earnings history below. Of course, the future is what really matters.

Chongqing Zhifei Biological Products is not owned by hedge funds. With a 48% stake, CEO Rensheng Jiang is the largest shareholder. With 5.4% and 3.8% of the shares outstanding respectively, Lingfeng Jiang and Tie Ying Liu are the second and third largest shareholders. Interestingly, the second-largest shareholder, Lingfeng Jiang is also Senior Key Executive, again, pointing towards strong insider ownership amongst the company's top shareholders.

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 are plenty of analysts covering the stock, so it might be worth seeing what they are forecasting, too.

Insider Ownership Of Chongqing Zhifei Biological Products

While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. Company management run the business, but the CEO will answer to the board, even if he or she is a member of it.

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 information suggests that insiders own more than half of Chongqing Zhifei Biological Products Co., Ltd.. This gives them effective control of the company. That means insiders have a very meaningful CN¥31b stake in this CN¥52b business. Most would be pleased to see the board is investing alongside them. You may wish to discover if they have been buying or selling.

General Public Ownership

The general public-- including retail investors -- own 26% 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.

Next Steps:

While it is well worth considering the different groups that own a company, there are other factors that are even more important. Consider risks, for instance. Every company has them, and we've spotted 1 warning sign for Chongqing Zhifei Biological Products you should know about.

If you are like me, you may want to think about whether this company will grow or shrink. Luckily, you can check this free report showing analyst forecasts for its 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.