Fujian Cosunter Pharmaceutical Co., Ltd.'s (SZSE:300436) stock price dropped 9.8% last week; retail investors would not be happy

Key Insights

• The considerable ownership by retail investors in Fujian Cosunter Pharmaceutical indicates that they collectively have a greater say in management and business strategy
• The top 25 shareholders own 42% of the company
• Insiders own 19% of Fujian Cosunter Pharmaceutical

Every investor in Fujian Cosunter Pharmaceutical Co., Ltd. (SZSE:300436) should be aware of the most powerful shareholder groups. The group holding the most number of shares in the company, around 58% to be precise, is retail investors. Put another way, the group faces the maximum upside potential (or downside risk).

And last week, retail investors endured the biggest losses as the stock fell by 9.8%.

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

See our latest analysis for Fujian Cosunter Pharmaceutical

What Does The Lack Of Institutional Ownership Tell Us About Fujian Cosunter Pharmaceutical?

Small companies that are not very actively traded often lack institutional investors, but it's less common to see large companies without them.

There are many reasons why a company might not have any institutions on the share registry. It may be hard for institutions to buy large amounts of shares, if liquidity (the amount of shares traded each day) is low. If the company has not needed to raise capital, institutions might lack the opportunity to build a position. Alternatively, there might be something about the company that has kept institutional investors away. Institutional investors may not find the historic growth of the business impressive, or there might be other factors at play. You can see the past revenue performance of Fujian Cosunter Pharmaceutical, for yourself, below.

Fujian Cosunter Pharmaceutical is not owned by hedge funds. Fujian Effort Group Co. Ltd is currently the company's largest shareholder with 17% of shares outstanding. With 8.5% and 5.7% of the shares outstanding respectively, Liqing Ye and Guoping Li are the second and third largest shareholders. Guoping Li, who is the third-largest shareholder, also happens to hold the title of Chairman of the Board.

Our studies suggest that the top 25 shareholders collectively control less than half of the company's shares, meaning that the company's shares are widely disseminated and there is no dominant shareholder.

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. 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 Fujian Cosunter Pharmaceutical

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.

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.

It seems insiders own a significant proportion of Fujian Cosunter Pharmaceutical Co., Ltd.. Insiders own CN¥1.1b worth of shares in the CN¥5.8b company. We would say this shows alignment with shareholders, but it is worth noting that the company is still quite small; some insiders may have founded the business. You can click here to see if those insiders have been buying or selling.

General Public Ownership

The general public, who are usually individual investors, hold a substantial 58% stake in Fujian Cosunter Pharmaceutical, suggesting it is a fairly popular stock. With this amount of ownership, retail investors can collectively play a role in decisions that affect shareholder returns, such as dividend policies and the appointment of directors. They can also exercise the power to vote on acquisitions or mergers that may not improve profitability.

Private Company Ownership

Our data indicates that Private Companies hold 22%, of the company's shares. It's hard to draw any conclusions from this fact alone, so its worth looking into who owns those private companies. Sometimes insiders or other related parties have an interest in shares in a public company through a separate private company.

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 example, we've discovered 3 warning signs for Fujian Cosunter Pharmaceutical (2 are 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.