Beijing Fourth Paradigm Technology Co., Ltd.'s (HKG:6682) market cap rose HK$1.1b last week; retail investors who hold 45% profited and so did insiders

Key Insights

• The considerable ownership by retail investors in Beijing Fourth Paradigm Technology indicates that they collectively have a greater say in management and business strategy
• The top 9 shareholders own 51% of the company
• 20% of Beijing Fourth Paradigm Technology is held by insiders

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To get a sense of who is truly in control of Beijing Fourth Paradigm Technology Co., Ltd. (HKG:6682), it is important to understand the ownership structure of the business. We can see that retail investors own the lion's share in the company with 45% ownership. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

Retail investors gained the most after market cap touched HK$29b last week, while insiders who own 20% also benefitted.

Let's delve deeper into each type of owner of Beijing Fourth Paradigm Technology, beginning with the chart below.

View our latest analysis for Beijing Fourth Paradigm Technology

What Does The Institutional Ownership Tell Us About Beijing Fourth Paradigm 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 Fourth Paradigm Technology already has institutions on the share registry. Indeed, they own a respectable stake in the company. This suggests some credibility amongst professional investors. But we can't rely on that fact alone since institutions make bad investments sometimes, just like everyone does. 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 Fourth Paradigm Technology'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 Fourth Paradigm Technology. With a 20% stake, CEO Wenyuan Dai is the largest shareholder. Beijing Fourth Paradigm Technology Co., Ltd. Employee share incentive plan is the second largest shareholder owning 13% of common stock, and Fullgoal Fund Management Co. Ltd. holds about 4.4% of the company stock.

We did some more digging and found that 9 of the top shareholders account for roughly 51% of the register, implying that along with larger shareholders, there are a few smaller shareholders, thereby balancing out each others interests somewhat.

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 a reasonable number of analysts covering the stock, so it might be useful to find out their aggregate view on the future.

Insider Ownership Of Beijing Fourth Paradigm Technology

The definition of company insiders can be subjective and does vary between jurisdictions. Our data reflects individual insiders, capturing board members at the very least. 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 most recent data indicates that insiders own a reasonable proportion of Beijing Fourth Paradigm Technology Co., Ltd.. It is very interesting to see that insiders have a meaningful HK$5.8b stake in this HK$29b business. Most would say this shows a good degree of alignment with shareholders, especially in a company of this size. 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 45% stake in Beijing Fourth Paradigm Technology. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.

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.

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.