Key Insights

• Insiders appear to have a vested interest in LBX Pharmacy Chain's growth, as seen by their sizeable ownership
• The top 3 shareholders own 53% of the company
• 22% of LBX Pharmacy Chain is held by Institutions

If you want to know who really controls LBX Pharmacy Chain Joint Stock Company (SHSE:603883), then you'll have to look at the makeup of its share registry. We can see that individual insiders own the lion's share in the company with 29% 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, insiders scored the highest last week as the company hit CN¥19b market cap following a 4.6% gain in the stock.

In the chart below, we zoom in on the different ownership groups of LBX Pharmacy Chain.

What Does The Institutional Ownership Tell Us About LBX Pharmacy Chain?

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.

As you can see, institutional investors have a fair amount of stake in LBX Pharmacy Chain. 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. 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 LBX Pharmacy Chain's historic earnings and revenue below, but keep in mind there's always more to the story.

LBX Pharmacy Chain is not owned by hedge funds. Looking at our data, we can see that the largest shareholder is Zilong Xie with 28% of shares outstanding. With 22% and 3.2% of the shares outstanding respectively, Leader (Cayman Islands) Limited and Rongtong Fund Management Co. Ltd. are the second and third largest shareholders.

After doing some more digging, we found that the top 3 shareholders collectively control more than half of the company's shares, implying that they have considerable power to influence the company's decisions.

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 LBX Pharmacy Chain

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. 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.

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.

Our most recent data indicates that insiders own a reasonable proportion of LBX Pharmacy Chain Joint Stock Company. It has a market capitalization of just CN¥19b, and insiders have CN¥5.5b worth of shares in their own names. That's quite significant. Most would be pleased to see the board is investing alongside them. You may wish to access this free chart showing recent trading by insiders.

General Public Ownership

With a 26% ownership, the general public, mostly comprising of individual investors, have some degree of sway over LBX Pharmacy Chain. 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

We can see that Private Companies own 23%, of the shares on issue. 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:

While it is well worth considering the different groups that own a company, there are other factors that are even more important. Take risks for example - LBX Pharmacy Chain has 1 warning sign we think you should be aware of.

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.