Beijing Emerging Eastern Aviation Equipment Co., Ltd.'s (SZSE:002933) 11% gain last week benefited both retail investors who own 43% as well as insiders

Key Insights

• Significant control over Beijing Emerging Eastern Aviation Equipment by retail investors implies that the general public has more power to influence management and governance-related decisions
• The top 7 shareholders own 51% of the company
• 26% of Beijing Emerging Eastern Aviation Equipment is held by insiders

To get a sense of who is truly in control of Beijing Emerging Eastern Aviation Equipment Co., Ltd. (SZSE:002933), it is important to understand the ownership structure of the business. The group holding the most number of shares in the company, around 43% to be precise, is retail investors. Put another way, the group faces the maximum upside potential (or downside risk).

While retail investors were the group that reaped the most benefits after last week’s 11% price gain, insiders also received a 26% cut.

Let's delve deeper into each type of owner of Beijing Emerging Eastern Aviation Equipment, beginning with the chart below.

View our latest analysis for Beijing Emerging Eastern Aviation Equipment

What Does The Institutional Ownership Tell Us About Beijing Emerging Eastern Aviation Equipment?

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.

We can see that Beijing Emerging Eastern Aviation Equipment does have institutional investors; and they hold a good portion of the company's stock. 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 Emerging Eastern Aviation Equipment'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 Emerging Eastern Aviation Equipment. Chang'an Huitong Co.,Ltd. is currently the largest shareholder, with 21% of shares outstanding. With 18% and 3.7% of the shares outstanding respectively, Yue Dai and Beijing Co-bridge Capital Investment Advisory Co., Ltd. are the second and third largest shareholders.

On further inspection, we found that more than half the company's shares are owned by the top 7 shareholders, suggesting that the interests of the larger shareholders are balanced out to an extent by the smaller ones.

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. We're not picking up on any analyst coverage of the stock at the moment, so the company is unlikely to be widely held.

Insider Ownership Of Beijing Emerging Eastern Aviation Equipment

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

It seems insiders own a significant proportion of Beijing Emerging Eastern Aviation Equipment Co., Ltd.. It has a market capitalization of just CN¥3.1b, and insiders have CN¥829m worth of shares in their own names. We would say this shows alignment with shareholders, but it is worth noting that the company is still quite small; some insiders may have founded the business. You can click here to see if those insiders have been buying or selling.

General Public Ownership

The general public, who are usually individual investors, hold a 43% stake in Beijing Emerging Eastern Aviation Equipment. 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

It seems that Private Companies own 21%, of the Beijing Emerging Eastern Aviation Equipment stock. It might be worth looking deeper into this. If related parties, such as insiders, have an interest in one of these private companies, that should be disclosed in the annual report. Private companies may also have a strategic interest in the company.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand Beijing Emerging Eastern Aviation Equipment better, we need to consider many other factors. For instance, we've identified 2 warning signs for Beijing Emerging Eastern Aviation Equipment (1 is potentially serious) that you should be aware of.

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.

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.