With 59% ownership, Chongqing Zhifei Biological Products Co., Ltd. (SZSE:300122) insiders have a lot riding on the company's future

Key Insights

• Significant insider control over Chongqing Zhifei Biological Products implies vested interests in company growth
• The top 2 shareholders own 54% of the company
• Institutional ownership in Chongqing Zhifei Biological Products is 13%

Every investor in Chongqing Zhifei Biological Products Co., Ltd. (SZSE:300122) should be aware of the most powerful shareholder groups. 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.

With such a notable stake in the company, insiders would be highly incentivised to make value accretive decisions.

Let's take a closer look to see what the different types of shareholders can tell us about Chongqing Zhifei Biological Products.

View 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. 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. The company's CEO Rensheng Jiang is the largest shareholder with 48% of shares outstanding. Lingfeng Jiang is the second largest shareholder owning 5.4% of common stock, and Tie Ying Liu holds about 3.8% of the company stock. 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.

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. There are a reasonable number of analysts covering the stock, so it might be useful to find out their aggregate view on the future.

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. 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.

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 Chongqing Zhifei Biological Products Co., Ltd.. This gives them effective control of the company. Insiders own CN¥34b worth of shares in the CN¥58b company. That's extraordinary! 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, who are usually individual investors, hold a 28% stake in Chongqing Zhifei Biological Products. 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.

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. Consider risks, for instance. Every company has them, and we've spotted 2 warning signs for Chongqing Zhifei Biological Products you should know about.

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.