Tan Chong Motor Holdings Berhad's (KLSE:TCHONG) top owners are private companies with 45% stake, while 25% is held by insiders
editorial-team@simplywallst.com (Simply Wall St)
4 min read
Key Insights
Tan Chong Motor Holdings Berhad's significant private companies ownership suggests that the key decisions are influenced by shareholders from the larger public
52% of the business is held by the top 3 shareholders
A look at the shareholders of Tan Chong Motor Holdings Berhad (KLSE:TCHONG) can tell us which group is most powerful. And the group that holds the biggest piece of the pie are private companies with 45% ownership. Put another way, the group faces the maximum upside potential (or downside risk).
Individual insiders, on the other hand, account for 25% of the company's stockholders. Generally speaking, as a company grows, institutions will increase their ownership. Conversely, insiders often decrease their ownership over time.
Let's delve deeper into each type of owner of Tan Chong Motor Holdings Berhad, beginning with the chart below.
What Does The Institutional Ownership Tell Us About Tan Chong Motor Holdings Berhad?
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.
As you can see, institutional investors have a fair amount of stake in Tan Chong Motor Holdings Berhad. 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 Tan Chong Motor Holdings Berhad, (below). Of course, keep in mind that there are other factors to consider, too.
KLSE:TCHONG Earnings and Revenue Growth August 24th 2024
We note that hedge funds don't have a meaningful investment in Tan Chong Motor Holdings Berhad. Our data shows that Tan Chong Consolidated Sdn Bhd is the largest shareholder with 40% of shares outstanding. In comparison, the second and third largest shareholders hold about 6.0% and 5.7% of the stock.
A more detailed study of the shareholder registry showed us that 3 of the top shareholders have a considerable amount of ownership in the company, via their 52% stake.
Researching institutional ownership is a good way to gauge and filter a stock's expected performance. The same can be achieved by studying analyst sentiments. There are plenty of analysts covering the stock, so it might be worth seeing what they are forecasting, too.
Insider Ownership Of Tan Chong Motor Holdings Berhad
While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. 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.
Our information suggests that insiders maintain a significant holding in Tan Chong Motor Holdings Berhad. It has a market capitalization of just RM469m, and insiders have RM118m worth of shares in their own names. This may suggest that the founders still own a lot of shares. You can click here to see if they have been buying or selling.
General Public Ownership
The general public-- including retail investors -- own 12% stake in the company, and hence can't easily be ignored. 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 Company Ownership
We can see that Private Companies own 45%, of the shares on issue. Private companies may be related parties. Sometimes insiders have an interest in a public company through a holding in a private company, rather than in their own capacity as an individual. While it's hard to draw any broad stroke conclusions, it is worth noting as an area for further research.
Public Company Ownership
It appears to us that public companies own 5.7% of Tan Chong Motor Holdings Berhad. 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:
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. For instance, we've identified 1 warning sign for Tan Chong Motor Holdings Berhad that you should be aware of.
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.
