Key Insights

• Insiders appear to have a vested interest in Aurisco PharmaceuticalLtd's growth, as seen by their sizeable ownership
• The top 2 shareholders own 70% of the company
• Using data from company's past performance alongside ownership research, one can better assess the future performance of a company

Every investor in Aurisco Pharmaceutical Co.,Ltd. (SHSE:605116) should be aware of the most powerful shareholder groups. With 76% stake, individual insiders possess the maximum shares in the company. Put another way, the group faces the maximum upside potential (or downside risk).

Clearly, insiders benefitted the most after the company's market cap rose by CN¥422m last week.

In the chart below, we zoom in on the different ownership groups of Aurisco PharmaceuticalLtd.

What Does The Institutional Ownership Tell Us About Aurisco PharmaceuticalLtd?

Institutions typically measure themselves against a benchmark when reporting to their own investors, so they often become more enthusiastic about a stock once it's included in a major index. We would expect most companies to have some institutions on the register, especially if they are growing.

Institutions have a very small stake in Aurisco PharmaceuticalLtd. That indicates that the company is on the radar of some funds, but it isn't particularly popular with professional investors at the moment. If the company is growing earnings, that may indicate that it is just beginning to catch the attention of these deep-pocketed investors. When multiple institutional investors want to buy shares, we often see a rising share price. The past revenue trajectory (shown below) can be an indication of future growth, but there are no guarantees.

We note that hedge funds don't have a meaningful investment in Aurisco PharmaceuticalLtd. Looking at our data, we can see that the largest shareholder is Zhien Peng with 38% of shares outstanding. Yizhou Chu is the second largest shareholder owning 32% of common stock, and Peijing Qiu holds about 2.8% of the company stock. Peijing Qiu, who is the third-largest shareholder, also happens to hold the title of Member of the Board of Directors. Furthermore, CEO Dingjun Chu is the owner of 0.8% of the company's shares.

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. There is some analyst coverage of the stock, but it could still become more well known, with time.

Insider Ownership Of Aurisco 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.

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 most recent data indicates that insiders own the majority of Aurisco Pharmaceutical Co.,Ltd.. This means they can collectively make decisions for the company. Insiders own CN¥7.0b worth of shares in the CN¥9.3b company. That's extraordinary! Most would be pleased to see the board is investing alongside them. You may wish to discover if they have been buying or selling.

General Public Ownership

The general public, who are usually individual investors, hold a 15% stake in Aurisco PharmaceuticalLtd. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.

Private Company Ownership

Our data indicates that Private Companies hold 4.1%, 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:

It's always worth thinking about the different groups who own shares in a company. But to understand Aurisco PharmaceuticalLtd better, we need to consider many other factors. For example, we've discovered 1 warning sign for Aurisco PharmaceuticalLtd that you should be aware of before investing here.

Ultimately the future is most important. You can access this free report on analyst forecasts for the company.

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.