Teyi Pharmaceutical Group Co.,Ltd (SZSE:002728) surges 13%; individual investors who own 56% shares profited along with insiders

Key Insights

• Significant control over Teyi Pharmaceutical GroupLtd by individual investors implies that the general public has more power to influence management and governance-related decisions
• The top 24 shareholders own 44% of the company
• Insider ownership in Teyi Pharmaceutical GroupLtd is 39%

Every investor in Teyi Pharmaceutical Group Co.,Ltd (SZSE:002728) should be aware of the most powerful shareholder groups. We can see that individual investors own the lion's share in the company with 56% ownership. Put another way, the group faces the maximum upside potential (or downside risk).

While individual investors were the group that benefitted the most from last week’s CN¥469m market cap gain, insiders too had a 39% share in those profits.

Let's delve deeper into each type of owner of Teyi Pharmaceutical GroupLtd, beginning with the chart below.

View our latest analysis for Teyi Pharmaceutical GroupLtd

What Does The Institutional Ownership Tell Us About Teyi Pharmaceutical GroupLtd?

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 Teyi Pharmaceutical GroupLtd. This can indicate that the company has a certain degree of credibility in the investment community. However, it is best to be wary of relying on the supposed validation that comes with institutional investors. They too, get it wrong sometimes. 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 Teyi Pharmaceutical GroupLtd's historic earnings and revenue below, but keep in mind there's always more to the story.

We note that hedge funds don't have a meaningful investment in Teyi Pharmaceutical GroupLtd. Danqing Xu is currently the largest shareholder, with 27% of shares outstanding. Meanwhile, the second and third largest shareholders, hold 8.0% and 2.3%, of the shares outstanding, respectively. Songqing Xu, who is the second-largest shareholder, also happens to hold the title of Senior Key Executive.

Our studies suggest that the top 24 shareholders collectively control less than half of the company's shares, meaning that the company's shares are widely disseminated and there is no dominant shareholder.

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 a little analyst coverage of the stock, but not much. So there is room for it to gain more coverage.

Insider Ownership Of Teyi Pharmaceutical GroupLtd

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.

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 information suggests that insiders maintain a significant holding in Teyi Pharmaceutical Group Co.,Ltd. Insiders own CN¥1.5b worth of shares in the CN¥3.9b company. It is great to see insiders so invested in the business. It might be worth checking if those insiders have been buying recently.

General Public Ownership

The general public, who are usually individual investors, hold a substantial 56% stake in Teyi Pharmaceutical GroupLtd, suggesting it is a fairly popular stock. With this amount of ownership, retail investors can collectively play a role in decisions that affect shareholder returns, such as dividend policies and the appointment of directors. They can also exercise the power to vote on acquisitions or mergers that may not improve profitability.

Next Steps:

While it is well worth considering the different groups that own a company, there are other factors that are even more important. Case in point: We've spotted 3 warning signs for Teyi Pharmaceutical GroupLtd you should be aware of, and 1 of them is a bit unpleasant.

If you are like me, you may want to think about whether this company will grow or shrink. Luckily, you can check this free report showing analyst forecasts for its 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.