Shenyang Xingqi Pharmaceutical Co.,Ltd.'s (SZSE:300573) last week's 4.9% decline must have disappointed individual investors who have a significant stake

Key Insights

• Significant control over Shenyang Xingqi PharmaceuticalLtd by individual investors implies that the general public has more power to influence management and governance-related decisions
• A total of 25 investors have a majority stake in the company with 47% ownership
• 31% of Shenyang Xingqi PharmaceuticalLtd is held by insiders

To get a sense of who is truly in control of Shenyang Xingqi Pharmaceutical Co.,Ltd. (SZSE:300573), it is important to understand the ownership structure of the business. We can see that individual investors own the lion's share in the company with 52% ownership. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

Following a 4.9% decrease in the stock price last week, individual investors suffered the most losses, but insiders who own 31% stock also took a hit.

Let's take a closer look to see what the different types of shareholders can tell us about Shenyang Xingqi PharmaceuticalLtd.

View our latest analysis for Shenyang Xingqi PharmaceuticalLtd

What Does The Institutional Ownership Tell Us About Shenyang Xingqi PharmaceuticalLtd?

Institutional investors commonly compare their own returns to the returns of a commonly followed index. So they generally do consider buying larger companies that are included in the relevant benchmark index.

Shenyang Xingqi PharmaceuticalLtd already has institutions on the share registry. Indeed, they own a respectable stake in the company. This suggests some credibility amongst professional investors. But we can't rely on that fact alone since institutions make bad investments sometimes, just like everyone does. When multiple institutions own a stock, there's always a risk that they are in a 'crowded trade'. When such a trade goes wrong, multiple parties may compete to sell stock fast. This risk is higher in a company without a history of growth. You can see Shenyang Xingqi PharmaceuticalLtd's historic earnings and revenue below, but keep in mind there's always more to the story.

We note that hedge funds don't have a meaningful investment in Shenyang Xingqi PharmaceuticalLtd. The company's largest shareholder is Jidong Liu, with ownership of 29%. Meanwhile, the second and third largest shareholders, hold 4.6% and 3.7%, of the shares outstanding, respectively. Additionally, the company's CEO E. Gao directly holds 1.2% of the total shares outstanding.

A deeper look at our ownership data shows that the top 25 shareholders collectively hold less than half of the register, suggesting a large group of small holders where no single shareholder has a majority.

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. While there is some analyst coverage, the company is probably not widely covered. So it could gain more attention, down the track.

Insider Ownership Of Shenyang Xingqi PharmaceuticalLtd

The definition of an insider can differ slightly between different countries, but members of the board of directors always count. 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.

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 insiders own a significant proportion of Shenyang Xingqi Pharmaceutical Co.,Ltd.. It is very interesting to see that insiders have a meaningful CN¥7.9b stake in this CN¥26b business. It is good to see this level of investment. You can check here to see if those insiders have been buying recently.

General Public Ownership

The general public -- including retail investors -- own 52% of Shenyang Xingqi PharmaceuticalLtd. 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.

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 Shenyang Xingqi PharmaceuticalLtd that you should be aware of.

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com