Insiders of Beijing Airdoc Technology Co., Ltd. (HKG:2251) must be disappointed as stock fell 15% after recent purchases

Key Insights

• Significant insider control over Beijing Airdoc Technology implies vested interests in company growth
• 52% of the business is held by the top 6 shareholders
• Recent purchases by insiders

If you want to know who really controls Beijing Airdoc Technology Co., Ltd. (HKG:2251), then you'll have to look at the makeup of its share registry. The group holding the most number of shares in the company, around 29% to be precise, is individual insiders. Put another way, the group faces the maximum upside potential (or downside risk).

A quick look at our data suggests that insiders have been buying shares in the company recently. So the news of stock price falling by 15% is not something they might have been expecting soon after purchasing shares.

In the chart below, we zoom in on the different ownership groups of Beijing Airdoc Technology.

See our latest analysis for Beijing Airdoc Technology

What Does The Institutional Ownership Tell Us About Beijing Airdoc Technology?

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 Airdoc Technology 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. 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 Airdoc Technology's earnings history below. Of course, the future is what really matters.

Hedge funds don't have many shares in Beijing Airdoc Technology. Looking at our data, we can see that the largest shareholder is the CEO Dalei Zhang with 17% of shares outstanding. Fosun International Holdings Ltd. is the second largest shareholder owning 9.5% of common stock, and Tomasz Mialkos holds about 9.0% of the company stock.

We did some more digging and found that 6 of the top shareholders account for roughly 52% of the register, implying that along with larger shareholders, there are a few smaller shareholders, thereby balancing out each others interests somewhat.

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. While there is some analyst coverage, the company is probably not widely covered. So it could gain more attention, down the track.

Insider Ownership Of Beijing Airdoc Technology

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.

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.

It seems insiders own a significant proportion of Beijing Airdoc Technology Co., Ltd.. Insiders have a HK$300m stake in this HK$1.0b business. This may suggest that the founders still own a lot of shares. You can click here to see if they have been buying or selling.

General Public Ownership

The general public-- including retail investors -- own 28% 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

Our data indicates that Private Companies hold 23%, of the company's shares. 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:

It's always worth thinking about the different groups who own shares in a company. But to understand Beijing Airdoc Technology better, we need to consider many other factors.

I always like to check for a history of revenue growth. You can too, by accessing this free chart of historic revenue and earnings in this detailed graph.

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.