While individual investors own 25% of Taiwan High Speed Rail Corporation (TWSE:2633), state or government are its largest shareholders with 43% ownership

Key Insights

• Significant control over Taiwan High Speed Rail by state or government implies that the general public has more power to influence management and governance-related decisions
• A total of 3 investors have a majority stake in the company with 52% ownership
• 15% of Taiwan High Speed Rail is held by Institutions

A look at the shareholders of Taiwan High Speed Rail Corporation (TWSE:2633) can tell us which group is most powerful. With 43% stake, state or government 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.

Meanwhile, individual investors make up 25% of the company’s shareholders.

In the chart below, we zoom in on the different ownership groups of Taiwan High Speed Rail.

Check out our latest analysis for Taiwan High Speed Rail

What Does The Institutional Ownership Tell Us About Taiwan High Speed Rail?

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 Taiwan High Speed Rail 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 Taiwan High Speed Rail's earnings history below. Of course, the future is what really matters.

We note that hedge funds don't have a meaningful investment in Taiwan High Speed Rail. Looking at our data, we can see that the largest shareholder is Ministry of Transportation and Communications R.O.C. with 43% of shares outstanding. Meanwhile, the second and third largest shareholders, hold 4.6% and 4.3%, of the shares outstanding, respectively.

After doing some more digging, we found that the top 3 shareholders collectively control more than half of the company's shares, implying that they have considerable power to influence the company's decisions.

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. We're not picking up on any analyst coverage of the stock at the moment, so the company is unlikely to be widely held.

Insider Ownership Of Taiwan High Speed Rail

The definition of an insider can differ slightly between different countries, but members of the board of directors always count. 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.

Our information suggests that Taiwan High Speed Rail Corporation insiders own under 1% of the company. But they may have an indirect interest through a corporate structure that we haven't picked up on. It is a pretty big company, so it would be possible for board members to own a meaningful interest in the company, without owning much of a proportional interest. In this case, they own around NT$5.0m worth of shares (at current prices). 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-- including retail investors -- own 25% stake in the company, and hence can't easily be ignored. While this size of ownership may not be enough to sway a policy decision in their favour, they can still make a collective impact on company policies.

Private Company Ownership

It seems that Private Companies own 8.2%, of the Taiwan High Speed Rail 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 9.4% of Taiwan High Speed Rail. It's hard to say for sure but this suggests they have entwined business interests. This might be a strategic stake, so it's worth watching this space for changes in ownership.

Next Steps:

I find it very interesting to look at who exactly owns a company. But to truly gain insight, we need to consider other information, too. Be aware that Taiwan High Speed Rail is showing 4 warning signs in our investment analysis , and 2 of those are significant...

If you would prefer check out another company -- one with potentially superior financials -- then do not miss this free list of interesting companies, backed by strong financial data.

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.