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
• 55% of the business is held by the top 2 shareholders
• 12% 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. We can see that public companies own the lion's share in the company with 41% ownership. Put another way, the group faces the maximum upside potential (or downside risk).

As a result, public companies collectively scored the highest last week as the company hit HK$24b market cap following a 5.9% gain in the stock.

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. 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. China Three Gorges Corporation is the second largest shareholder owning 14% of common stock, and Min Zhou holds about 3.7% of the company stock. Min Zhou, who is the third-largest shareholder, also happens to hold the title of Member of the Board of Directors.

To make our study more interesting, we found that the top 2 shareholders have a majority ownership in the company, meaning that they are powerful enough to influence the decisions of the company.

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 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.

Most consider insider ownership a positive because it can indicate the board is well aligned with other shareholders. However, on some occasions too much power is concentrated within this group.

We can report that insiders do own shares in Beijing Enterprises Water Group Limited. The insiders have a meaningful stake worth HK$874m. Most would see this as a real positive. It is good to see this level of investment by insiders. You can check here to see if those insiders have been buying recently.

General Public Ownership

The general public-- including retail investors -- own 28% 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

It seems that Private Companies own 14%, of the Beijing Enterprises Water Group stock. 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

Public companies currently own 41% of Beijing Enterprises Water Group stock. 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. To that end, you should be aware of the 2 warning signs we've spotted with Beijing Enterprises Water Group .

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.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.