Following recent decline, Chongqing Zhifei Biological Products Co., Ltd.'s (SZSE:300122) top shareholder CEO Rensheng Jiang sees holdings value drop by 3.4%

Key Insights

• Insiders appear to have a vested interest in Chongqing Zhifei Biological Products' growth, as seen by their sizeable ownership
• The top 2 shareholders own 54% of the company
• Institutional ownership in Chongqing Zhifei Biological Products is 17%

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. Put another way, the group faces the maximum upside potential (or downside risk).

As a result, insiders as a group endured the highest losses after market cap fell by CN¥2.6b.

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

Check out our latest analysis for Chongqing Zhifei Biological Products

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

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.

Chongqing Zhifei Biological Products already has institutions on the share registry. Indeed, they own a respectable stake in the company. 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. It is not uncommon to see a big share price drop if two large institutional investors try to sell out of a stock at the same time. So it is worth checking the past earnings trajectory of Chongqing Zhifei Biological Products, (below). Of course, keep in mind that there are other factors to consider, too.

Hedge funds don't have many shares in Chongqing Zhifei Biological Products. With a 48% stake, CEO Rensheng Jiang is the largest shareholder. For context, the second largest shareholder holds about 5.4% of the shares outstanding, followed by an ownership of 3.8% by the third-largest shareholder. Interestingly, the second-largest shareholder, Lingfeng Jiang is also Senior Key Executive, again, pointing towards strong insider ownership amongst the company's top shareholders.

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.

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. Quite a few analysts cover the stock, so you could look into forecast growth quite easily.

Insider Ownership Of Chongqing Zhifei Biological Products

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.

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.

It seems that insiders own more than half the Chongqing Zhifei Biological Products Co., Ltd. stock. This gives them a lot of power. That means insiders have a very meaningful CN¥43b stake in this CN¥73b business. It is good to see this level of investment. You can check here to see if those insiders have been selling any of their shares.

General Public Ownership

The general public-- including retail investors -- own 24% 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:

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. For instance, we've identified 1 warning sign for Chongqing Zhifei Biological Products that 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.