Public companies are CSPC Innovation Pharmaceutical Co., Ltd.'s (SZSE:300765) biggest owners and were rewarded after market cap rose by CN¥3.4b last week

Key Insights

• The considerable ownership by public companies in CSPC Innovation Pharmaceutical indicates that they collectively have a greater say in management and business strategy
• CSPC Pharmaceutical Group Limited owns 75% of the company
• Institutions own 11% of CSPC Innovation Pharmaceutical

Every investor in CSPC Innovation Pharmaceutical Co., Ltd. (SZSE:300765) should be aware of the most powerful shareholder groups. We can see that public companies own the lion's share in the company with 75% ownership. Put another way, the group faces the maximum upside potential (or downside risk).

As a result, public companies were the biggest beneficiaries of last week’s 8.6% gain.

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

Check out our latest analysis for CSPC Innovation Pharmaceutical

What Does The Institutional Ownership Tell Us About CSPC Innovation Pharmaceutical?

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.

We can see that CSPC Innovation Pharmaceutical does have institutional investors; and they hold a good portion of the company's stock. 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. 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 CSPC Innovation Pharmaceutical, (below). Of course, keep in mind that there are other factors to consider, too.

We note that hedge funds don't have a meaningful investment in CSPC Innovation Pharmaceutical. Our data shows that CSPC Pharmaceutical Group Limited is the largest shareholder with 75% of shares outstanding. This implies that they have majority interest control of the future of the company. Meanwhile, the second and third largest shareholders, hold 2.5% and 0.5%, of the shares outstanding, respectively.

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. 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 CSPC Innovation 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.

Our data suggests that insiders own under 1% of CSPC Innovation Pharmaceutical Co., Ltd. in their own names. It's a big company, so even a small proportional interest can create alignment between the board and shareholders. In this case insiders own CN¥551k worth of shares. It is always good to see at least some insider ownership, but it might be worth checking if those insiders have been selling.

General Public Ownership

The general public, who are usually individual investors, hold a 13% stake in CSPC Innovation Pharmaceutical. 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.

Public Company Ownership

It appears to us that public companies own 75% of CSPC Innovation Pharmaceutical. We can't be certain but it is quite possible this is a strategic stake. The businesses may be similar, or work together.

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. To that end, you should learn about the 2 warning signs we've spotted with CSPC Innovation Pharmaceutical (including 1 which is significant) .

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.