Private companies are China Resources Beer (Holdings) Company Limited's (HKG:291) biggest owners and were hit after market cap dropped HK$3.6b

Key Insights

• China Resources Beer (Holdings)'s significant private companies ownership suggests that the key decisions are influenced by shareholders from the larger public
• 52% of the company is held by a single shareholder (China Resources Company Limited)
• Institutional ownership in China Resources Beer (Holdings) is 17%

A look at the shareholders of China Resources Beer (Holdings) Company Limited (HKG:291) can tell us which group is most powerful. With 52% stake, private companies possess the maximum shares in the company. Put another way, the group faces the maximum upside potential (or downside risk).

And last week, private companies endured the biggest losses as the stock fell by 3.5%.

In the chart below, we zoom in on the different ownership groups of China Resources Beer (Holdings).

View our latest analysis for China Resources Beer (Holdings)

What Does The Institutional Ownership Tell Us About China Resources Beer (Holdings)?

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.

China Resources Beer (Holdings) 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. 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 China Resources Beer (Holdings), (below). Of course, keep in mind that there are other factors to consider, too.

China Resources Beer (Holdings) is not owned by hedge funds. China Resources Company Limited is currently the largest shareholder, with 52% of shares outstanding. With such a huge stake in the ownership, we infer that they have significant control of the future of the company. With 1.9% and 1.3% of the shares outstanding respectively, The Vanguard Group, Inc. and First Sentier Investors (Australia) IM Ltd are the second and third largest shareholders.

While studying institutional ownership for a company can add value to your research, it is also a good practice to research analyst recommendations to get a deeper understand of a stock's expected performance. There are plenty of analysts covering the stock, so it might be worth seeing what they are forecasting, too.

Insider Ownership Of China Resources Beer (Holdings)

The definition of an insider can differ slightly between different countries, but members of the board of directors always count. Management ultimately answers to the board. However, it is not uncommon for managers to be executive board members, especially if they are a founder or the CEO.

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 information suggests that China Resources Beer (Holdings) Company Limited insiders own under 1% of the company. We do note, however, it is possible insiders have an indirect interest through a private company or other corporate structure. Being so large, we would not expect insiders to own a large proportion of the stock. Collectively, they own HK$42m of stock. 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-- including retail investors -- own 31% stake in the company, and hence can't easily be ignored. 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 52%, of the China Resources Beer (Holdings) stock. It's hard to draw any conclusions from this fact alone, so its worth looking into who owns those private companies. Sometimes insiders or other related parties have an interest in shares in a public company through a separate private 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.

Many find it useful to take an in depth look at how a company has performed in the past. You can access this detailed graph of past earnings, revenue and cash flow.

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.