Beijing Sifang Automation Co.,Ltd's (SHSE:601126) stock price dropped 3.3% last week; private companies would not be happy

Key Insights

• Significant control over Beijing Sifang AutomationLtd by private companies implies that the general public has more power to influence management and governance-related decisions
• A total of 5 investors have a majority stake in the company with 51% ownership
• Institutions own 17% of Beijing Sifang AutomationLtd

If you want to know who really controls Beijing Sifang Automation Co.,Ltd (SHSE:601126), then you'll have to look at the makeup of its share registry. With 47% stake, private companies possess the maximum shares in the company. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

And following last week's 3.3% decline in share price, private companies suffered the most losses.

Let's delve deeper into each type of owner of Beijing Sifang AutomationLtd, beginning with the chart below.

See our latest analysis for Beijing Sifang AutomationLtd

What Does The Institutional Ownership Tell Us About Beijing Sifang AutomationLtd?

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.

Beijing Sifang AutomationLtd already has institutions on the share registry. Indeed, they own a respectable stake in the company. 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. 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 Beijing Sifang AutomationLtd's earnings history below. Of course, the future is what really matters.

We note that hedge funds don't have a meaningful investment in Beijing Sifang AutomationLtd. Sifang Electric (Group) Co.,Ltd. is currently the largest shareholder, with 42% of shares outstanding. Meanwhile, the second and third largest shareholders, hold 4.6% and 1.9%, of the shares outstanding, respectively.

On looking further, we found that 51% of the shares are owned by the top 5 shareholders. In other words, these shareholders have a meaningful say in the decisions of the company.

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

Insider Ownership Of Beijing Sifang AutomationLtd

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.

Most consider insider ownership a positive because it can indicate the board is well aligned with other shareholders. However, on some occasions too much power is concentrated within this group.

We can see that insiders own shares in Beijing Sifang Automation Co.,Ltd. The insiders have a meaningful stake worth CN¥220m. Most would see this as a real positive. If you would like to explore the question of insider alignment, you can click here to see if insiders have been buying or selling.

General Public Ownership

With a 34% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Beijing Sifang AutomationLtd. While this size of ownership may not be enough to sway a policy decision in their favour, they can still make a collective impact on company policies.

Private Company Ownership

We can see that Private Companies own 47%, of the shares on issue. Private companies may be related parties. Sometimes insiders have an interest in a public company through a holding in a private company, rather than in their own capacity as an individual. While it's hard to draw any broad stroke conclusions, it is worth noting as an area for further research.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand Beijing Sifang AutomationLtd better, we need to consider many other factors. Case in point: We've spotted 1 warning sign for Beijing Sifang AutomationLtd 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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.