Private companies among Lushang Freda Pharmaceutical Co.,Ltd.'s (SHSE:600223) largest stockholders and were hit after last week's 7.1% price drop

Key Insights

• The considerable ownership by private companies in Lushang Freda PharmaceuticalLtd indicates that they collectively have a greater say in management and business strategy
• The largest shareholder of the company is Shandong Commercial Group Co.Ltd with a 53% stake
• Analyst forecasts along with ownership data serve to give a strong idea about prospects for a business

A look at the shareholders of Lushang Freda Pharmaceutical Co.,Ltd. (SHSE:600223) can tell us which group is most powerful. And the group that holds the biggest piece of the pie are private companies with 55% ownership. Put another way, the group faces the maximum upside potential (or downside risk).

As market cap fell to CN¥8.2b last week, private companies would have faced the highest losses than any other shareholder groups of the company.

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

See our latest analysis for Lushang Freda PharmaceuticalLtd

What Does The Institutional Ownership Tell Us About Lushang Freda PharmaceuticalLtd?

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 Lushang Freda PharmaceuticalLtd 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. If multiple institutions change their view on a stock at the same time, you could see the share price drop fast. It's therefore worth looking at Lushang Freda PharmaceuticalLtd's earnings history below. Of course, the future is what really matters.

Hedge funds don't have many shares in Lushang Freda PharmaceuticalLtd. Looking at our data, we can see that the largest shareholder is Shandong Commercial Group Co.Ltd with 53% of shares outstanding. This essentially means that they have extensive influence, if not outright control, over the future of the corporation. In comparison, the second and third largest shareholders hold about 1.7% and 1.4% of the stock.

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 Lushang Freda PharmaceuticalLtd

While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. 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 information suggests that Lushang Freda Pharmaceutical Co.,Ltd. insiders own under 1% of the company. We do note, however, it is possible insiders have an indirect interest through a private company or other corporate structure. 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¥8.1m worth of shares. Arguably, recent buying and selling is just as important to consider. You can click here to see if insiders have been buying or selling.

General Public Ownership

The general public-- including retail investors -- own 37% stake in the company, and hence can't easily be ignored. 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.

Private Company Ownership

Our data indicates that Private Companies hold 55%, 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. Case in point: We've spotted 1 warning sign for Lushang Freda PharmaceuticalLtd you should be aware of.

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.