Following recent decline, Beisen Holding Limited's (HKG:9669) top shareholder Top Key Executive Zhaohui Wang sees holdings value drop by 6.5%

Key Insights

• Significant insider control over Beisen Holding implies vested interests in company growth
• The top 6 shareholders own 56% of the company
• Institutional ownership in Beisen Holding is 10%

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To get a sense of who is truly in control of Beisen Holding Limited (HKG:9669), 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 34% ownership. Put another way, the group faces the maximum upside potential (or downside risk).

As a result, insiders as a group endured the highest losses after market cap fell by HK$400m.

Let's take a closer look to see what the different types of shareholders can tell us about Beisen Holding.

See our latest analysis for Beisen Holding

What Does The Institutional Ownership Tell Us About Beisen Holding?

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.

We can see that Beisen Holding does have institutional investors; and they hold a good portion of the company's stock. 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 Beisen Holding, (below). Of course, keep in mind that there are other factors to consider, too.

It would appear that 6.7% of Beisen Holding shares are controlled by hedge funds. That worth noting, since hedge funds are often quite active investors, who may try to influence management. Many want to see value creation (and a higher share price) in the short term or medium term. Because actions speak louder than words, we consider it a good sign when insiders own a significant stake in a company. In Beisen Holding's case, its Top Key Executive, Zhaohui Wang, is the largest shareholder, holding 12% of shares outstanding. For context, the second largest shareholder holds about 12% of the shares outstanding, followed by an ownership of 10% by the third-largest shareholder. Interestingly, the second-largest shareholder, Weiguo Ji is also Chief Executive Officer, again, pointing towards strong insider ownership amongst the company's top shareholders.

We also observed that the top 6 shareholders account for more than half of the share register, with a few smaller shareholders to balance the interests of the larger ones to a certain extent.

While it makes sense to study institutional ownership data for a company, it also makes sense to study analyst sentiments to know which way the wind is blowing. 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 Beisen Holding

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.

It seems insiders own a significant proportion of Beisen Holding Limited. It has a market capitalization of just HK$5.7b, and insiders have HK$1.9b worth of shares in their own names. 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, who are usually individual investors, hold a 22% stake in Beisen Holding. This size of ownership, while considerable, may not be enough to change company policy if the decision is not in sync with other large shareholders.

Private Equity Ownership

With an ownership of 18%, private equity firms are in a position to play a role in shaping corporate strategy with a focus on value creation. Some investors might be encouraged by this, since private equity are sometimes able to encourage strategies that help the market see the value in the company. Alternatively, those holders might be exiting the investment after taking it public.

Private Company Ownership

Our data indicates that Private Companies hold 9.0%, 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 Beisen Holding better, we need to consider many other factors.

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.