Public companies are Beijing Enterprises Water Group Limited's (HKG:371) biggest owners and were rewarded after market cap rose by HK$1.5b last week

Key Insights

• Significant control over Beijing Enterprises Water Group by public companies implies that the general public has more power to influence management and governance-related decisions
• 55% of the business is held by the top 2 shareholders
• 13% of Beijing Enterprises Water Group is held by Institutions

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. The group holding the most number of shares in the company, around 41% to be precise, is public companies. Put another way, the group faces the maximum upside potential (or downside risk).

Clearly, public companies benefitted the most after the company's market cap rose by HK$1.5b last week.

Let's take a closer look to see what the different types of shareholders can tell us about Beijing Enterprises Water Group.

Check out 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 can indicate that the company has a certain degree of credibility in the investment community. However, it is best to be wary of relying on the supposed validation that comes with institutional investors. They too, get it wrong sometimes. 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 Beijing Enterprises Water Group, (below). Of course, keep in mind that there are other factors to consider, too.

Beijing Enterprises Water Group is not owned by hedge funds. The company's largest shareholder is Beijing Enterprises Holdings Limited, with ownership of 41%. 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.

A more detailed study of the shareholder registry showed us that 2 of the top shareholders have a considerable amount of ownership in the company, via their 55% stake.

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

Insider Ownership Of Beijing Enterprises Water Group

The definition of an insider can differ slightly between different countries, but members of the board of directors always count. Company management run the business, but the CEO will answer to the board, even if he or she is a member of it.

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.

We can report that insiders do own shares in Beijing Enterprises Water Group Limited. It is a pretty big company, so it is generally a positive to see some potentially meaningful alignment. In this case, they own around HK$889m worth of shares (at current prices). Most would say this shows alignment of interests between shareholders and the board. Still, it might be worth checking if those insiders have been selling.

General Public Ownership

The general public, who are usually individual investors, hold a 28% stake in Beijing Enterprises Water Group. 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 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. Consider for instance, the ever-present spectre of investment risk. We've identified 2 warning signs with Beijing Enterprises Water Group , and understanding them should be part of your investment process.

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.