Key Insights

• Significant control over Dizal (Jiangsu) Pharmaceutical by private equity firms implies that the general public has more power to influence management and governance-related decisions
• A total of 2 investors have a majority stake in the company with 52% ownership
• Institutional ownership in Dizal (Jiangsu) Pharmaceutical is 12%

Every investor in Dizal (Jiangsu) Pharmaceutical Co., Ltd. (SHSE:688192) should be aware of the most powerful shareholder groups. And the group that holds the biggest piece of the pie are private equity firms with 31% ownership. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

As a result, private equity firms collectively scored the highest last week as the company hit CN¥15b market cap following a 10% gain in the stock.

In the chart below, we zoom in on the different ownership groups of Dizal (Jiangsu) Pharmaceutical.

What Does The Institutional Ownership Tell Us About Dizal (Jiangsu) 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.

Dizal (Jiangsu) Pharmaceutical already has institutions on the share registry. Indeed, they own a respectable stake in the company. This implies the analysts working for those institutions have looked at the stock and they like it. But just like anyone else, they could be wrong. 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 Dizal (Jiangsu) Pharmaceutical's earnings history below. Of course, the future is what really matters.

Dizal (Jiangsu) Pharmaceutical is not owned by hedge funds. The company's largest shareholder is SDIC Innovation Investment Management Co., Ltd., with ownership of 26%. Meanwhile, the second and third largest shareholders, hold 26% and 14%, of the shares outstanding, respectively. In addition, we found that Zhang Xiaolin, the CEO has 1.8% of the shares allocated to their name.

After doing some more digging, we found that the top 2 shareholders collectively control more than half of the company's shares, implying that they have considerable power to influence the company's decisions.

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. Quite a few analysts cover the stock, so you could look into forecast growth quite easily.

Insider Ownership Of Dizal (Jiangsu) Pharmaceutical

The definition of an insider can differ slightly between different countries, but members of the board of directors always count. Company management run the business, but the CEO will answer to the board, even if he or she is a member of it.

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.

We can see that insiders own shares in Dizal (Jiangsu) Pharmaceutical Co., Ltd.. The insiders have a meaningful stake worth CN¥491m. Most would see this as a real positive. It is good to see this level of investment by insiders. You can check here to see if those insiders have been buying recently.

General Public Ownership

The general public-- including retail investors -- own 12% stake in the company, and hence can't easily be ignored. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.

Private Equity Ownership

Private equity firms hold a 31% stake in Dizal (Jiangsu) Pharmaceutical. This suggests they can be influential in key policy decisions. Sometimes we see private equity stick around for the long term, but generally speaking they have a shorter investment horizon and -- as the name suggests -- don't invest in public companies much. After some time they may look to sell and redeploy capital elsewhere.

Private Company Ownership

It seems that Private Companies own 15%, of the Dizal (Jiangsu) Pharmaceutical stock. It might be worth looking deeper into this. If related parties, such as insiders, have an interest in one of these private companies, that should be disclosed in the annual report. Private companies may also have a strategic interest in the company.

Public Company Ownership

We can see that public companies hold 26% of the Dizal (Jiangsu) Pharmaceutical shares on issue. It's hard to say for sure but this suggests they have entwined business interests. This might be a strategic stake, so it's worth watching this space for changes in ownership.

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 Dizal (Jiangsu) Pharmaceutical that you should be aware of.

But ultimately it is the future, not the past, that will determine how well the owners of this business will do. Therefore we think it advisable to take a look at this free report showing whether analysts are predicting a brighter 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.