Private companies are BOE Varitronix Limited's (HKG:710) biggest owners and were hit after market cap dropped HK$443m

Key Insights

• Significant control over BOE Varitronix by private companies implies that the general public has more power to influence management and governance-related decisions
• 53% of the company is held by a single shareholder (Beijing Electronics Holding Co., Ltd.)
• Using data from analyst forecasts alongside ownership research, one can better assess the future performance of a company

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If you want to know who really controls BOE Varitronix Limited (HKG:710), then you'll have to look at the makeup of its share registry. We can see that private companies own the lion's share in the company with 53% ownership. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

And last week, private companies endured the biggest losses as the stock fell by 8.6%.

In the chart below, we zoom in on the different ownership groups of BOE Varitronix.

See our latest analysis for BOE Varitronix

What Does The Institutional Ownership Tell Us About BOE Varitronix?

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.

We can see that BOE Varitronix does have institutional investors; and they hold a good portion of the company's stock. 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. When multiple institutions own a stock, there's always a risk that they are in a 'crowded trade'. When such a trade goes wrong, multiple parties may compete to sell stock fast. This risk is higher in a company without a history of growth. You can see BOE Varitronix's historic earnings and revenue below, but keep in mind there's always more to the story.

We note that hedge funds don't have a meaningful investment in BOE Varitronix. Our data shows that Beijing Electronics Holding Co., Ltd. is the largest shareholder with 53% of shares outstanding. This essentially means that they have extensive influence, if not outright control, over the future of the corporation. China Orient Asset Management (International) Holding Limited is the second largest shareholder owning 4.3% of common stock, and The Vanguard Group, Inc. holds about 1.9% of the company stock.

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. 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 BOE Varitronix

The definition of an insider can differ slightly between different countries, but members of the board of directors always count. The company management answer to the board and the latter should represent the interests of shareholders. Notably, sometimes top-level managers are on the board themselves.

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 data suggests that insiders own under 1% of BOE Varitronix Limited in their own names. However, it's possible that insiders might have an indirect interest through a more complex structure. It appears that the board holds about HK$20m worth of stock. This compares to a market capitalization of HK$4.7b. Many investors in smaller companies prefer to see the board more heavily invested. 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 38% stake in BOE Varitronix. 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 53%, 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 BOE Varitronix better, we need to consider many other factors. Be aware that BOE Varitronix is showing 2 warning signs in our investment analysis , you should know about...

Ultimately the future is most important. You can access this free report on analyst forecasts for the company.

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.