Insiders the biggest winners as Beijing Beimo High-tech Frictional Material Co.,Ltd's (SZSE:002985) market cap rises to CN¥8.2b

Key Insights

• Significant insider control over Beijing Beimo High-tech Frictional MaterialLtd implies vested interests in company growth
• The top 4 shareholders own 51% of the company
• Ownership research along with analyst forecasts data help provide a good understanding of opportunities in a stock

To get a sense of who is truly in control of Beijing Beimo High-tech Frictional Material Co.,Ltd (SZSE:002985), it is important to understand the ownership structure of the business. We can see that individual insiders own the lion's share in the company with 51% ownership. Put another way, the group faces the maximum upside potential (or downside risk).

As a result, insiders were the biggest beneficiaries of last week’s 5.3% gain.

In the chart below, we zoom in on the different ownership groups of Beijing Beimo High-tech Frictional MaterialLtd.

View our latest analysis for Beijing Beimo High-tech Frictional MaterialLtd

What Does The Institutional Ownership Tell Us About Beijing Beimo High-tech Frictional MaterialLtd?

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 Beimo High-tech Frictional MaterialLtd already has institutions on the share registry. Indeed, they own a respectable stake in the company. This implies the analysts working for those institutions have looked at the stock and they like it. But just like anyone else, they could be wrong. It is not uncommon to see a big share price drop if two large institutional investors try to sell out of a stock at the same time. So it is worth checking the past earnings trajectory of Beijing Beimo High-tech Frictional MaterialLtd, (below). Of course, keep in mind that there are other factors to consider, too.

We note that hedge funds don't have a meaningful investment in Beijing Beimo High-tech Frictional MaterialLtd. Our data shows that Shuming Wang is the largest shareholder with 36% of shares outstanding. In comparison, the second and third largest shareholders hold about 10.0% and 2.3% of the stock. Jianfeng Chen, who is the second-largest shareholder, also happens to hold the title of Senior Key Executive.

Our research also brought to light the fact that roughly 51% of the company is controlled by the top 4 shareholders suggesting that these owners wield significant influence on the business.

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 Beimo High-tech Frictional MaterialLtd

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.

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 own more than half of Beijing Beimo High-tech Frictional Material Co.,Ltd. This gives them effective control of the company. Insiders own CN¥4.2b worth of shares in the CN¥8.2b company. That's extraordinary! It is good to see this level of investment. You can check here to see if those insiders have been selling any of their shares.

General Public Ownership

With a 38% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Beijing Beimo High-tech Frictional MaterialLtd. 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 4.7%, of the shares on issue. 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:

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. Be aware that Beijing Beimo High-tech Frictional MaterialLtd is showing 1 warning sign in our investment analysis , you should know about...

Ultimately the future is most important. You can access this free report on analyst forecasts for the company.

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.