Chang Hwa Commercial Bank, Ltd.'s (TWSE:2801) top owners are retail investors with 39% stake, while 26% is held by institutions

Key Insights

• Chang Hwa Commercial Bank's significant retail investors ownership suggests that the key decisions are influenced by shareholders from the larger public
• A total of 12 investors have a majority stake in the company with 50% ownership
• Institutional ownership in Chang Hwa Commercial Bank is 26%

If you want to know who really controls Chang Hwa Commercial Bank, Ltd. (TWSE:2801), then you'll have to look at the makeup of its share registry. And the group that holds the biggest piece of the pie are retail investors with 39% ownership. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

And institutions on the other hand have a 26% ownership in the company. Institutions will often hold stock in bigger companies, and we expect to see insiders owning a noticeable percentage of the smaller ones.

Let's take a closer look to see what the different types of shareholders can tell us about Chang Hwa Commercial Bank.

See our latest analysis for Chang Hwa Commercial Bank

What Does The Institutional Ownership Tell Us About Chang Hwa Commercial Bank?

Institutions typically measure themselves against a benchmark when reporting to their own investors, so they often become more enthusiastic about a stock once it's included in a major index. We would expect most companies to have some institutions on the register, especially if they are growing.

As you can see, institutional investors have a fair amount of stake in Chang Hwa Commercial Bank. This implies the analysts working for those institutions have looked at the stock and they like it. But just like anyone else, they could be wrong. 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 Chang Hwa Commercial Bank, (below). Of course, keep in mind that there are other factors to consider, too.

Chang Hwa Commercial Bank is not owned by hedge funds. Looking at our data, we can see that the largest shareholder is Ministry Of Finance, Taiwan with 12% of shares outstanding. With 7.5% and 5.6% of the shares outstanding respectively, Chunghwa Post Co., Ltd. and Taishin Financial Holding Co., Ltd. are the second and third largest shareholders.

Looking at the shareholder registry, we can see that 50% of the ownership is controlled by the top 12 shareholders, meaning that no single shareholder has a majority interest in the ownership.

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. Our information suggests that there isn't any analyst coverage of the stock, so it is probably little known.

Insider Ownership Of Chang Hwa Commercial Bank

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.

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.

Our data suggests that insiders own under 1% of Chang Hwa Commercial Bank, Ltd. in their own names. We do note, however, it is possible insiders have an indirect interest through a private company or other corporate structure. Keep in mind that it's a big company, and the insiders own NT$19m worth of shares. The absolute value might be more important than the proportional share. It is good to see board members owning shares, but it might be worth checking if those insiders have been buying.

General Public Ownership

The general public, who are usually individual investors, hold a 39% stake in Chang Hwa Commercial Bank. 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 Equity Ownership

With an ownership of 5.4%, private equity firms are in a position to play a role in shaping corporate strategy with a focus on value creation. Some might like this, because private equity are sometimes activists who hold management accountable. But other times, private equity is selling out, having taking the company public.

Private Company Ownership

It seems that Private Companies own 11%, of the Chang Hwa Commercial Bank stock. It might be worth looking deeper into this. If related parties, such as insiders, have an interest in one of these private companies, that should be disclosed in the annual report. Private companies may also have a strategic interest in the company.

Public Company Ownership

It appears to us that public companies own 5.6% of Chang Hwa Commercial Bank. 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:

While it is well worth considering the different groups that own a company, there are other factors that are even more important. Consider for instance, the ever-present spectre of investment risk. We've identified 1 warning sign with Chang Hwa Commercial Bank , and understanding them should be part of your investment process.

Of course this may not be the best stock to buy. Therefore, you may wish to see our free collection of interesting prospects boasting favorable financials.

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.

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