Public companies who hold 38% of Beijing New Building Materials Public Limited Company (SZSE:000786) gained 4.0%, institutions profited as well

Key Insights

• Beijing New Building Materials' significant public companies ownership suggests that the key decisions are influenced by shareholders from the larger public
• The top 2 shareholders own 52% of the company
• Institutions own 37% of Beijing New Building Materials

If you want to know who really controls Beijing New Building Materials Public Limited Company (SZSE:000786), 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 public companies with 38% ownership. Put another way, the group faces the maximum upside potential (or downside risk).

While public companies were the group that benefitted the most from last week’s CN¥1.9b market cap gain, institutions too had a 37% share in those profits.

Let's delve deeper into each type of owner of Beijing New Building Materials, beginning with the chart below.

See our latest analysis for Beijing New Building Materials

What Does The Institutional Ownership Tell Us About Beijing New Building Materials?

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 New Building Materials already has institutions on the share registry. Indeed, they own a respectable stake in the company. 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. 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 Beijing New Building Materials' historic earnings and revenue below, but keep in mind there's always more to the story.

Beijing New Building Materials is not owned by hedge funds. China National Building Material Company Limited is currently the largest shareholder, with 38% of shares outstanding. With 14% and 6.7% of the shares outstanding respectively, Hong Kong Exchanges & Clearing Limited, Asset Management Arm and Taian Guotai Min'an Investment Group Co., Ltd. are the second and third largest shareholders.

After doing some more digging, we found that the top 2 shareholders collectively control more than half of the company's shares, implying that they have considerable power to influence the company's decisions.

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 are plenty of analysts covering the stock, so it might be worth seeing what they are forecasting, too.

Insider Ownership Of Beijing New Building Materials

While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. 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.

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 most recent data indicates that insiders own some shares in Beijing New Building Materials Public Limited Company. It is a pretty big company, so it is generally a positive to see some potentially meaningful alignment. In this case, they own around CN¥2.5b worth of shares (at current prices). It is good to see this level of investment by insiders. You can check here to see if those insiders have been buying recently.

General Public Ownership

With a 20% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Beijing New Building Materials. 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.

Public Company Ownership

We can see that public companies hold 38% of the Beijing New Building Materials shares on issue. This may be a strategic interest and the two companies may have related business interests. It could be that they have de-merged. This holding is probably worth investigating further.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand Beijing New Building Materials better, we need to consider many other factors. For instance, we've identified 1 warning sign for Beijing New Building Materials that 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.

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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.