While public companies own 41% of PCCW Limited (HKG:8), retail investors are its largest shareholders with 42% ownership

Key Insights

• Significant control over PCCW by retail investors implies that the general public has more power to influence management and governance-related decisions
• A total of 5 investors have a majority stake in the company with 51% ownership
• Recent purchases by insiders

To get a sense of who is truly in control of PCCW Limited (HKG:8), it is important to understand the ownership structure of the business. The group holding the most number of shares in the company, around 42% to be precise, is retail investors. Put another way, the group faces the maximum upside potential (or downside risk).

And public companies on the other hand have a 41% ownership in the company.

Let's delve deeper into each type of owner of PCCW, beginning with the chart below.

See our latest analysis for PCCW

What Does The Institutional Ownership Tell Us About PCCW?

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 PCCW. 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 PCCW, (below). Of course, keep in mind that there are other factors to consider, too.

Hedge funds don't have many shares in PCCW. Our data shows that Pacific Century Regional Developments Limited is the largest shareholder with 23% of shares outstanding. China United Network Communications Limited is the second largest shareholder owning 18% of common stock, and Tzar Kai Li holds about 6.2% of the company stock. 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 51% of the shares are owned by the top 5 shareholders. In other words, these shareholders have a meaningful say in the decisions of the company.

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. 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. The company management answer to the board and the latter should represent the interests of shareholders. Notably, sometimes top-level managers are on the board themselves.

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.

Shareholders would probably be interested to learn that insiders own shares in PCCW Limited. This is a big company, so it is good to see this level of alignment. Insiders own HK$1.8b worth of shares (at current prices). If you would like to explore the question of insider alignment, you can click here to see if insiders have been buying or selling.

General Public Ownership

With a 42% 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

It appears to us that public companies own 41% of PCCW. 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:

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 a bit unpleasant) we think you should know about.

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.