Beijing United Information Technology Co.,Ltd.'s (SHSE:603613) last week's 3.2% decline must have disappointed retail investors who have a significant stake

Key Insights

• Significant control over Beijing United Information TechnologyLtd by retail investors implies that the general public has more power to influence management and governance-related decisions
• The top 8 shareholders own 51% of the company
• Insiders own 35% of Beijing United Information TechnologyLtd

If you want to know who really controls Beijing United Information Technology Co.,Ltd. (SHSE:603613), then you'll have to look at the makeup of its share registry. And the group that holds the biggest piece of the pie are retail investors with 44% ownership. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

While insiders, who own 35% shares weren’t spared from last week’s CN¥510m market cap drop, retail investors as a group suffered the maximum losses

Let's take a closer look to see what the different types of shareholders can tell us about Beijing United Information TechnologyLtd.

See our latest analysis for Beijing United Information TechnologyLtd

What Does The Institutional Ownership Tell Us About Beijing United Information TechnologyLtd?

Many institutions measure their performance against an index that approximates the local market. So they usually pay more attention to companies that are included in major indices.

Beijing United Information TechnologyLtd 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 United Information TechnologyLtd's earnings history below. Of course, the future is what really matters.

Beijing United Information TechnologyLtd is not owned by hedge funds. With a 17% stake, CEO Xiaojun Qian is the largest shareholder. Quan Liu is the second largest shareholder owning 17% of common stock, and China Merchants Fund Management Company Ltd. holds about 5.0% of the company stock.

We did some more digging and found that 8 of the top shareholders account for roughly 51% of the register, implying that along with larger shareholders, there are a few smaller shareholders, thereby balancing out each others interests somewhat.

Researching institutional ownership is a good way to gauge and filter a stock's expected performance. The same can be achieved by studying analyst sentiments. 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 Beijing United Information TechnologyLtd

The definition of an insider can differ slightly between different countries, but members of the board of directors always count. The company management answer to the board and the latter should represent the interests of shareholders. Notably, sometimes top-level managers are on the board themselves.

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 Beijing United Information Technology Co.,Ltd.. It has a market capitalization of just CN¥15b, and insiders have CN¥5.5b worth of shares in their own names. That's quite significant. Most would say this shows a good degree of alignment with shareholders, especially in a company of this size. You can click here to see if those insiders have been buying or selling.

General Public Ownership

The general public-- including retail investors -- own 44% stake in the company, and hence can't easily be ignored. This size of ownership, while considerable, may not be enough to change company policy if the decision is not in sync with other large shareholders.

Next Steps:

I find it very interesting to look at who exactly owns a company. But to truly gain insight, we need to consider other information, too. Case in point: We've spotted 3 warning signs for Beijing United Information TechnologyLtd you should be aware of, and 1 of them shouldn't be ignored.

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.

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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.

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