Beijing Enterprises Water Group Limited's (HKG:371) market cap dropped HK$904m last week; Public companies bore the brunt

Key Insights

• The considerable ownership by public companies in Beijing Enterprises Water Group indicates that they collectively have a greater say in management and business strategy
• A total of 2 investors have a majority stake in the company with 55% ownership
• Institutional ownership in Beijing Enterprises Water Group is 13%

If you want to know who really controls Beijing Enterprises Water Group Limited (HKG:371), then you'll have to look at the makeup of its share registry. With 41% stake, public companies possess the maximum shares in the company. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

And following last week's 4.0% decline in share price, public companies suffered the most losses.

In the chart below, we zoom in on the different ownership groups of Beijing Enterprises Water Group.

View our latest analysis for Beijing Enterprises Water Group

What Does The Institutional Ownership Tell Us About Beijing Enterprises Water Group?

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 Beijing Enterprises Water Group 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 Beijing Enterprises Water Group's historic earnings and revenue below, but keep in mind there's always more to the story.

Beijing Enterprises Water Group is not owned by hedge funds. Beijing Enterprises Holdings Limited is currently the largest shareholder, with 41% of shares outstanding. In comparison, the second and third largest shareholders hold about 14% and 3.7% of the stock. Min Zhou, who is the third-largest shareholder, also happens to hold the title of Member of the Board of Directors.

After doing some more digging, we found that the top 2 shareholders collectively control more than half of the company's shares, implying that they have considerable power to influence the company's decisions.

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. Quite a few analysts cover the stock, so you could look into forecast growth quite easily.

Insider Ownership Of Beijing Enterprises Water Group

While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. 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.

We can see that insiders own shares in Beijing Enterprises Water Group Limited. The insiders have a meaningful stake worth HK$799m. Most would see this as a real positive. If you would like to explore the question of insider alignment, you can click here to see if insiders have been buying or selling.

General Public Ownership

The general public-- including retail investors -- own 27% stake in the company, and hence can't easily be ignored. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.

Private Company Ownership

We can see that Private Companies own 14%, of the shares on issue. 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.

Public Company Ownership

We can see that public companies hold 41% of the Beijing Enterprises Water Group shares on issue. We can't be certain but it is quite possible this is a strategic stake. The businesses may be similar, or work together.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand Beijing Enterprises Water Group better, we need to consider many other factors. For instance, we've identified 2 warning signs for Beijing Enterprises Water Group that you should be aware of.

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.