BOC Aviation Limited's (HKG:2588) top owners are private equity firms with 70% stake, while 18% is held by institutions

Key Insights

• Significant control over BOC Aviation by private equity firms implies that the general public has more power to influence management and governance-related decisions
• 70% of the company is held by a single shareholder (Bank of China Group Investment Limited)
• Institutions own 18% of BOC Aviation

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Every investor in BOC Aviation Limited (HKG:2588) should be aware of the most powerful shareholder groups. And the group that holds the biggest piece of the pie are private equity firms with 70% ownership. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

Institutions, on the other hand, account for 18% of the company's stockholders. Institutions will often hold stock in bigger companies, and we expect to see insiders owning a noticeable percentage of the smaller ones.

Let's delve deeper into each type of owner of BOC Aviation, beginning with the chart below.

View our latest analysis for BOC Aviation

What Does The Institutional Ownership Tell Us About BOC Aviation?

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.

BOC Aviation 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 BOC Aviation's earnings history below. Of course, the future is what really matters.

Hedge funds don't have many shares in BOC Aviation. Bank of China Group Investment Limited is currently the company's largest shareholder with 70% of shares outstanding. This implies that they have majority interest control of the future of the company. With 10.0% and 1.3% of the shares outstanding respectively, Fidelity International Ltd and BlackRock, Inc. are the second and third largest shareholders.

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

Insider Ownership Of BOC Aviation

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.

Our information suggests that BOC Aviation Limited insiders own under 1% of the company. It's a big company, so even a small proportional interest can create alignment between the board and shareholders. In this case insiders own HK$76m worth of shares. It is always good to see at least some insider ownership, but it might be worth checking if those insiders have been selling.

General Public Ownership

The general public, who are usually individual investors, hold a 11% stake in BOC Aviation. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.

Private Equity Ownership

With an ownership of 70%, private equity firms are in a position to play a role in shaping corporate strategy with a focus on value creation. Sometimes we see private equity stick around for the long term, but generally speaking they have a shorter investment horizon and -- as the name suggests -- don't invest in public companies much. After some time they may look to sell and redeploy capital elsewhere.

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. For example, we've discovered 3 warning signs for BOC Aviation (1 is potentially serious!) that you should be aware of before investing here.

If you are like me, you may want to think about whether this company will grow or shrink. Luckily, you can check this free report showing analyst forecasts for its 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.