Key Insights

• Significant control over PCCW by public companies implies that the general public has more power to influence management and governance-related decisions
• A total of 4 investors have a majority stake in the company with 50% ownership
• Institutional ownership in PCCW is 11%

A look at the shareholders of PCCW Limited (HKG:8) can tell us which group is most powerful. And the group that holds the biggest piece of the pie are public companies with 41% ownership. Put another way, the group faces the maximum upside potential (or downside risk).

Meanwhile, individual investors make up 41% of the company's shareholders.

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

What Does The Institutional Ownership Tell Us About PCCW?

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 PCCW 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. If multiple institutions change their view on a stock at the same time, you could see the share price drop fast. It's therefore worth looking at PCCW's earnings history below. Of course, the future is what really matters.

Hedge funds don't have many shares in PCCW. Pacific Century Regional Developments Limited is currently the largest shareholder, with 23% of shares outstanding. For context, the second largest shareholder holds about 18% of the shares outstanding, followed by an ownership of 6.9% by the third-largest shareholder. Tzar Kai Li, who is the third-largest shareholder, also happens to hold the title of Chairman of the Board.

On looking further, we found that 50% of the shares are owned by the top 4 shareholders. In other words, these shareholders have a meaningful say in 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 PCCW

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. Management ultimately answers to the board. However, it is not uncommon for managers to be executive board members, especially if they are a founder or the CEO.

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 PCCW 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$2.3b worth of shares (at current prices). 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

With a 41% ownership, the general public, mostly comprising of individual investors, have some degree of sway over PCCW. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.

Public Company Ownership

Public companies currently own 41% of PCCW stock. This may be a strategic interest and the two companies may have related business interests. It could be that they have de-merged. This holding is probably worth investigating further.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand PCCW better, we need to consider many other factors. Take risks for example - PCCW has 2 warning signs (and 1 which is potentially serious) we think you should know about.

If you would prefer discover what analysts are predicting in terms of future growth, do not miss this free report on analyst forecasts.

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.