Can We See Significant Insider Ownership On The China Shineway Pharmaceutical Group Limited (HKG:2877) Share Register?

Simply Wall St

Every investor in China Shineway Pharmaceutical Group Limited (HKG:2877) should be aware of the most powerful shareholder groups. Institutions often own shares in more established companies, while it's not unusual to see insiders own a fair bit of smaller companies. I quite like to see at least a little bit of insider ownership. As Charlie Munger said 'Show me the incentive and I will show you the outcome.

China Shineway Pharmaceutical Group is a smaller company with a market capitalization of HK$5.9b, so it may still be flying under the radar of many institutional investors. Taking a look at our data on the ownership groups (below), it's seems that institutions own shares in the company. Let's take a closer look to see what the different types of shareholder can tell us about 2877.

See our latest analysis for China Shineway Pharmaceutical Group

SEHK:2877 Ownership Summary, November 9th 2019

What Does The Institutional Ownership Tell Us About China Shineway Pharmaceutical Group?

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.

As you can see, institutional investors own 9.8% of China Shineway Pharmaceutical Group. 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 China Shineway Pharmaceutical Group, (below). Of course, keep in mind that there are other factors to consider, too.

SEHK:2877 Income Statement, November 9th 2019

We note that hedge funds don't have a meaningful investment in China Shineway Pharmaceutical Group. Quite a few analysts cover the stock, so you could look into forecast growth quite easily.

Insider Ownership Of China Shineway Pharmaceutical Group

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 information suggests that insiders own more than half of China Shineway Pharmaceutical Group Limited. This gives them effective control of the company. Given it has a market cap of HK$5.9b, that means they have HK$4.2b worth of shares. It is good to see this level of investment. You can check here to see if those insiders have been buying recently.

General Public Ownership

The general public holds a 19% stake in 2877. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand China Shineway Pharmaceutical Group better, we need to consider many other factors.

Many find it useful to take an in depth look at how a company has performed in the past. You can access this detailed graph of past earnings, revenue and cash flow.

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.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.