Individual investors are Fujian Cosunter Pharmaceutical Co., Ltd.'s (SZSE:300436) biggest owners and were hit after market cap dropped CN¥635m

Key Insights

• The considerable ownership by individual investors in Fujian Cosunter Pharmaceutical indicates that they collectively have a greater say in management and business strategy
• A total of 22 investors have a majority stake in the company with 46% ownership
• Insider ownership in Fujian Cosunter Pharmaceutical is 19%

If you want to know who really controls Fujian Cosunter Pharmaceutical Co., Ltd. (SZSE:300436), then you'll have to look at the makeup of its share registry. With 54% stake, individual investors 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.

And last week, individual investors endured the biggest losses as the stock fell by 13%.

Let's take a closer look to see what the different types of shareholders can tell us about Fujian Cosunter Pharmaceutical.

Check out our latest analysis for Fujian Cosunter Pharmaceutical

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

We don't tend to see institutional investors holding stock of companies that are very risky, thinly traded, or very small. Though we do sometimes see large companies without institutions on the register, it's not particularly common.

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. The company's largest shareholder is Fujian Effort Group Co. Ltd, with ownership of 22%. For context, the second largest shareholder holds about 8.5% of the shares outstanding, followed by an ownership of 5.7% by the third-largest shareholder. 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 22 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 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. 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 Fujian Cosunter Pharmaceutical

While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. 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.

It seems insiders own a significant proportion of Fujian Cosunter Pharmaceutical Co., Ltd.. It has a market capitalization of just CN¥4.3b, and insiders have CN¥804m worth of shares in their own names. It is great to see insiders so invested in the business. It might be worth checking if those insiders have been buying recently.

General Public Ownership

The general public -- including retail investors -- own 54% of Fujian Cosunter Pharmaceutical. This size of ownership gives investors from the general public some collective power. They can and probably do influence decisions on executive compensation, dividend policies and proposed business acquisitions.

Private Company Ownership

It seems that Private Companies own 27%, of the Fujian Cosunter Pharmaceutical stock. Private companies may be related parties. Sometimes insiders have an interest in a public company through a holding in a private company, rather than in their own capacity as an individual. While it's hard to draw any broad stroke conclusions, it is worth noting as an area for further research.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand Fujian Cosunter Pharmaceutical better, we need to consider many other factors. To that end, you should be aware of the 3 warning signs we've spotted with Fujian Cosunter Pharmaceutical .

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.