Shareholder Structure Research Articles

Analysis of Motivation and Financial Effects of Stock Repurchase by Listed Companies Based on Tencent Holdings

With the gradual improvement of various systems in China's securities market, the advantages of stock buybacks have emerged, and the research object of this paper is the stock buyback event of Tencent Holdings in 2022. Through a comparative study of the financial data of Tencent Holdings, it is found that the motivation of Tencent Holdings' share repurchase includes (mainly potential motivation) the following, i.e., to improve the stock price, to improve the earnings per share, to optimize the capital structure of the enterprise, and to make full use of the cash flow. Tencent Holdings attempts to signal to investors that the company's share price is severely undervalued through share repurchases, attracting the attention of market investors, stabilizing and enhancing the share price, and increasing the overall market value of the enterprise. After analyzing the relevant financial indicators, this paper finds that share buybacks have no impact on Tencent Holdings' good solvency and profitability, which can enhance its operating capacity, and have not affected its shareholding structure. Against this background, this paper focuses on the motivation of Tencent Holdings' large-scale share buybacks on the Hong Kong Stock Exchange, as well as the chain reaction after the buybacks, and whether it can bring a positive financial effect to the enterprise is of significant significance to the maintenance of the listed company's market capitalization.

Probability of Default. A Machine Learning Approach for Non-Financial Companies

This paper aims to enhance credit risk assessment for non-financial companies in Romania by developing a machine learning (ML) model to estimate the probability of default. Utilizing an extensive set of microeconomic data, including financial statements, loan-level data from the Credit Risk Register, shareholder structure, export and import activities, and external debt, the model provides a comprehensive analysis of a company’s financial health and risk profile. The ML model employs logistic regression for classification, with 80% of the data used for training and 20% for validation. The model’s performance was evaluated using the receiver operating characteristic curve and confusion matrix, demonstrating an accuracy of 88%. Further validation through point-in-time estimation confirmed the model’s stability. The study is limited by the relatively low number of defaulting companies in the sample and the unique economic disruptions of 2020 due to the COVID-19 pandemic. To account for these factors, a Random Under Sample Boosted Trees approach is employed, which improves the model’s ability to distinguish between defaulted and non-defaulted debtors. Despite these limitations, the research concludes that integrating extensive financial data and advanced ML techniques have the potential to markedly enhance credit risk assessment, providing a reliable tool for financial institutions to manage credit risk effectively. Future improvements could address data imbalance and incorporate more diverse economic conditions to enhance predictive power for defaulting companies.

Beneficiary Ownership in Financial Services Sector Conglomerates in Indonesia

This research aims to explore the implications of beneficiary ownership in financial services sector conglomerates in Indonesia on financial system stability. Because financial services sector conglomerates can obscure the true beneficiaries within the conglomerate in Indonesia. This can pose risks to the financial system. If one financial institution within the conglomerate fails, it can have cascading effects on other institutions within the conglomerate. This can lead to systemic crises, which can harm the overall economy. Therefore, the problem lies in how to uncover the true beneficiaries within a financial services sector conglomerate in Indonesia. This is a normative legal research, prescriptive in nature, employing a legislative and legal comparison approach. Secondary data used includes legislation such as the Limited Liability Company Law, Banking Law, Financial Sector Development and Strengthening Law, as well as the Financial Services Authority Regulation on Financial Conglomerates. Additionally, international journals and legal dictionaries are used as references, supported by empirical data in the form of interviews with the Financial Services Authority. Data is analyzed qualitatively, with conclusions drawn using deductive-inductive reasoning. An individual or legal entity as a primary entity that can control changes in the Articles of Association, Share Ownership Structure, replacement of directors, board of commissioners, control the company's finances, but the individual/legal entity is not listed in the company's articles, then can be categorized as a beneficial owner of a limited liability company. Similarly, in a financial services sector conglomerate existing in Indonesia, it can be proven by finding out who controls the conglomerate.

Redefining Supply Chain Financing: The Role of Long-Term Investors and Intangible Assets from a Resource-Based View Perspective

Supply chain finance has the capacity to enhance the efficiency of financing and the ability to manage risk for all stakeholders involved in the supply chain, leading to the promotion of sustainable development, and fostering collaborative partnerships within the chain. The theoretical foundation for the evolution of supply chain finance and the optimal utilization of internal and external resources can be attributed to the resource-based view. Building upon this view, we propose establishing a framework for the relationship between supply chain finance, intangible assets, and long-term investors. However, it is crucial to note that, under the predominant shareholding structure of long-term investors, the value and safeguarding of intangible assets may not be effectively enhanced. This can have ramifications on the investment decisions and interest protection of long-term investors as well as hinder the competitiveness of enterprises and the efficacy of supply chain finance. Leveraging it allows for the extraction of value from intangible assets and attracts the support of long-term investors, thereby aiding enterprises in risk reduction, fostering innovation and technological advancement, and ultimately achieving sustained development. Our proposed model serves as a valuable reference for relevant enterprises and individuals seeking to utilize supply chain finance, particularly for entrepreneurs and innovative companies.

Equity Concentration and Inefficient Investment

Enterprise investment efficiency has been a hot topic of concern to all walks of life, and equity concentration, as an important element of corporate governance and modern enterprise construction, has attracted extensive attention from the academic community. Hence, this paper provides theoretical analyses and empirical tests on the relationship between corporate inefficient investment and equity concentration. After regression analysis, this paper finds that there is a significant negative relationship between equity concentration and the degree of inefficient investment, which confirms the hypothesis that equity concentration reduces the level of inefficient investment; compared to the company with CEO duality, in the case of equity concentration, the separation of decision-making power and decision-controlling power is more able to reduce the level of inefficient investment; However, the allocation of decision-making power does not have a significant effect on this relationship mechanism. This paper provides some theoretical basis and implications for how enterprises can optimise their shareholding structure and promote the reform of corporate governance modernisation so as to enhance investment efficiency.

The Distinction of Evaluation on Companies in Different Fields

This paper explores the variations in Return on Equity (ROE) and Price-to-Sales Ratio among publicly traded companies across different time periods and market capitalizations. The analysis employs Linear Regression and Correlation Coefficients to examine the relationships between ROE, Price-to-Sales Ratio, Market Capitalization, and economic conditions during these periods. The findings reveal that Price-to-Sales Ratio serves as a reliable indicator of a company's market capitalization. Furthermore, companies within the same industry exhibit substantial disparities in Market Capitalization, ROE, Price-to-Sales Ratio, Price-to-Earnings (P/E) Ratio, and PEG Index due to differing corporate strategies and backgrounds. For instance, in the new energy sector, both BYD and NIO display a negative correlation between market capitalization, while Tesla contradicts this trend. This discrepancy is attributed to internal factors such as asset composition, liabilities, and shareholder structure, which significantly influence a company's financial performance. The Market Capitalization of these new energy companies is predicted to rise due to global interest in AI technology, with technology companies being at the forefront of AI development. In the technology sector, companies like Google have solidified their positions by advancing AI concepts. New entrants, like Apple, combining Artificial Intelligence and Robotics, are gaining consumer support, indicating potential Market Cap. growth. The fashion industry also demonstrates distinctive strategies, with companies like NIKE, Adidas, and Anta focusing on sustainability and carbon neutrality. Therefore, future company evaluations should consider both financial indices and a company's long-term vision and sustainability practices to predict their future value effectively.

A study on the impact of the degree of mixed ownership reform of state-owned enterprises on corporate environmental response

PurposeThis study aims to explore the relationship between the degree of state-owned enterprises’ (SOEs) mixed reform and the environmental response of enterprises, against the background of actively promoting the reform of mixed ownership in China.Design/methodology/approachThe study is conducted on a sample of A-share listed manufacturing companies in Shanghai and Shenzhen of China, investigated for the period 2015 to 2020. The baseline regression results are robust to a series of robustness and endogeneity tests. To deal with the issue of endogeneity, the technique of instrumental variable method has been applied.FindingsThe study confirms the U-shaped effect of the depth and restriction of mixed ownership on SOEs’ environmentally responsive behaviour in the manufacturing industry, especially for lower environmental regulation and higher level of risk-taking firms. The findings indicate that the government, shareholders and other stakeholders of enterprises should not simply consider that the mixed reform is directly promoting or reducing the environmental response behaviour of enterprises.Practical implicationsSOEs should improve their shareholding structures to undermine performance enhancement at the expense of the environment and increase environmentally beneficial behaviours. Regulators and governments should improve the institutional mechanism of environmental regulation and make efforts to promote corporate awareness of the environment.Social implicationsAlthough the adoption and implementation of environmentally friendly policies are costly, improved environmental response and other social responsibilities are helpful to corporate long-term growth and reputation and obtain more capital market attention. Therefore, firms would benefit from improving their environmental response to protect nature, as well as to enjoy the economic and social benefits of a better environmental response.Originality/valueTo the best of the authors’ knowledge, there is a lack of studies focussing on the environmental behaviour of SOEs of mixed reform. As the mixed reform in China has come to a climax phase in recent several years, SOEs of mixed reform is an ideal environment for research. The study focusses on manufacturing firms as these firms are more susceptible to contribute to environmental pollution, exploitation of natural resources and labour concerns.

Political costs and investors’ site visits: evidence from the section 301 investigation

ABSTRACT We explore the relationship between political costs and investors’ site visits. We find that the Section 301 investigation launched by the United States government in 2017 increased Chinese high-tech companies’ resistance to site visits. This effect was more pronounced for companies receiving government subsidies and companies with political connections. We further find that high-tech companies underwent fewer site visits with independent institutions (i.e. securities firms, fund companies) but more site visits with security underwriters (non-independent institutions), depending on different investors’ ability to disseminate corporate information. Moreover, high-tech firms selectively avoided certain topics from discussion during site visits. Additionally, the corporate shareholder structure also changed with the adjustments of visiting investors. High-tech companies reduced their site visits to avoid negative economic consequences. Overall, our study provides evidence that political costs influence the information communication behaviour of companies in the country being investigated.

Multiple large shareholders and M&A quality: evidence from China

ABSTRACT This study investigates the influence of the presence of multiple large shareholders (MLS) on the quality of mergers and acquisitions (M&A). Using data from the Chinese market, we find that the presence of MLS in acquiring firms is associated with a higher level of goodwill impairment in the three-year period following the completion of an M&A transaction, relative to firms devoid of such shareholder structures. The further analysis suggests that the identity of these shareholders is crucial; specifically, when the second-largest shareholder is identical to the controlling shareholder, the adverse effects on goodwill valuation are more significant. This relationship is mitigated when the identities of the controlling and the second-largest shareholders differ. The impact is particularly noticeable in transactions involving commitment performance contracts, related party transactions, and in sectors characterized by high goodwill valuations. This study contributes to the literature on the economic outcomes associated with MLS structures in China, a context marked by the prevalence of such ownership arrangements and limited minority shareholder protections.

The Influence of Ownership Structure, Business Risk, Growth Opportunity on Dividend Policy

The aim of this research is to determine the effect of Ownership Structure, Business Risk and Growth Opportunity on Dividend Policy in Consumer Companies listed on the Indonesia Stock Exchange in 2017 – 2022. Through the purposive sampling method, samples were collected from 36 companies for 6 years for research puproses. By utilizing Microsoft Excel and Eview 9 application software, the analysis process for this research involves panel data regression analysis. According to research, dividend policy is influenced by ownership structure and business risk and growth opportunity. Share ownership structure has no effect on Dividen Policy, while business risk partially has an effect on Dividend Policy and Growth Opportunity has no effect on dividend policy

The Effect of Institutional Share Ownership, Ownership Structure, and Corporate Social Responsibility on Environmental Sustainability in Energy Companies in Indonesia

This research investigates the complex interplay between institutional share ownership, ownership structure, corporate social responsibility (CSR), and environmental sustainability in the context of Indonesian energy companies. A quantitative analysis utilizing structural equation modeling was employed to analyze data from a sample of 150 energy firms. The results reveal significant positive relationships: higher levels of CSR, increased institutional share ownership, and a more concentrated ownership structure are associated with improved environmental sustainability practices. These findings contribute to the understanding of the factors shaping environmental responsibility in the Indonesian energy sector, offering practical insights for companies and policymakers.

Motivations And Effects of NEEQ's Transfer To SSE STAR Market In The Context Of Registration Reform: A Case Study Of TZTEK

NEEQ, officially known as the National Equities Exchange and Quotations, is the third national equity trading venue after Shanghai Stock Exchange and Shenzhen Stock Exchange. The National Equities Exchange and Quotations Corporation Limited (NEEQ Co. Ltd.) was registered with the State Administration for Industry & Commerce (SAIC) on September 20, 2012 with registered capital of RMB 3 billion, and was inaugurated on January 16, 2013 and gradually opening up to all regions nationwide. For small and medium-sized enterprises (SMEs), NEEQ offers a vital financing channel and enhances their liquidity. As a result, the number of enterprises listing on the NEEQ market has surged. However, this growth has brought about certain issues that cannot be ignored and have become increasingly serious. These issues include a high concentration of equity ownership and a decline in market liquidity. Consequently, the trading volume and turnover rate of NEEQ-listed companies have been decreasing year by year. This decline has significantly constrained the growth potential of some promising enterprises, such as TZTEK. These companies, which typically have good growth prospects, are often compelled to consider transferring to a different board in pursuit of sustainable development. This paper will first introduce the research significance and background of this chosen topic. Secondly, it will provide an overview of TZTEK's background of board transfer and transfer process. Then, it will analyze the motivation behind TZTEK's board transfer from the perspectives of financing, shareholder structure, and company valuation. The study will also involve an analysis of market effects, growth capability, and debt repayment capacity for TZTEK, both before and after the board transfer, using a series of relevant data. Finally, the paper will conclude with a summary of the research findings.

Analysis of the Impact of Dual Shareholding Structures on the Governance of Technology-Based Firms

As a matter of fact, since the technological revolution, the use of dual shareholding structures has become more and more widespread in technology-based companies as the number of technology-based companies has increased. These start-ups with dual shareholding structures have grown rapidly and have been able to grow into large corporations in a relatively short period of time. On this basis, dual equity structure seems to be a perfect match for many technology-based companies. In order to explore the positive effects and risks of dual equity structure on the corporate governance of technology-based companies, this paper investigates, studies as well as analyzes the issues. According to the analysis, it is concluded that dual equity structure is favorable to consolidate the founder's control over the company, expand financing, but harms the interests of small and medium-sized shareholders, and is detrimental to the equality of shareholders. Overall, these results shed light on guiding further exploration of firm governance.

Does corporate ESG disclosure enhance investor relationship management? Evidence from China

AbstractThis study investigates the enhancing effect of environmental, social, and governance (ESG) disclosure on investor relations management (IRM). The better the ESG disclosure, the higher the level of IRM. furthermore, this enhancement is achieved by reducing information asymmetry, improving information dissemination efficiency, and attracting investors attention, and it is more prominent in a sound institutional environment and a concentrated shareholding structure. Moreover, institutional investors show greater receptivity to ESG‐driven IRM compared to individual investors. Finally, we indicate that IRM is enhanced by ESG disclosure, ultimately fostering high‐quality corporate development. These findings provide valuable insights for promoting the standardisation of ESG disclosure and optimising IRM practices.

Aktivistisch Investierende und ihre Einflussnahme auf Unternehmen

Abstract The growing presence of activist investors in Germany challenges companies with a confrontational style and broad demands. This article analyses the Anglo-American capital market phenomenon in the context of companies’ corporate governance and their shareholder structure. We examine the valuation effects of activist campaigns using share price reactions. The short-term announcement returns surrounding activist campaigns are positive and statistically significant. The mean abnormal share price return amounts to 3.96%. The results can be attributed to a combination of transaction and information effects.

Family Firms’ Shareholder Structure and International Acquisitions: A Differentiated Socioemotional Wealth Approach

From a mixed gamble perspective, we contend that family firms (FFs) with different family shareholder structures are confronted with different trade-offs among current and prospective financial and socioemotional wealth (SEW), leading to differences in their international acquisition choices. We also explore the moderating role of family leadership and performance aspirations. Our findings show that FFs with a dominant family owner are more likely to pursue international acquisitions, especially when FFs are led by a family CEO or when they experience below-target performance, as in such cases, they prioritize prospective financial and SEW gains, thereby sacrificing current SEW and financial wealth.

Social and environmental disclosure in Indonesia: Does ownership matter?

Research aims: This study aims to analyze the effect of ownership structure on social and environmental disclosure in the annual reports of companies in Indonesia.Design/Methodology/Approach: This study used 208 panel data from 52 companies in the mining and real estate and building construction sectors. The dependent variable in this study was obtained by analyzing the content of the company's annual report. The hypothesis in this study was then tested using multiple linear regression.Research findings: The regression test results revealed that institutional ownership and managerial ownership had a significant effect on social and environmental disclosure. In contrast, multiple large shareholder structures (MLSS) had an insignificant effect on social and environmental disclosure.Theoretical contribution/Originality: This study enriches the literature about social and environmental disclosure with a new approach named SEDI. In addition, this research contributes to the scrutiny of the effect of MLSS on social and environmental disclosure, especially in the Indonesian context. This study also provides empirical evidence on the influence of ownership structure on social and environmental disclosure.Research limitation/Implication: This research was only limited to companies with many contacts with social and environmental issues, namely mining, agriculture, and real estate and building construction. Meanwhile, other companies are expected to be scrutinized in future research.

The Effect of Corporate Social Responsibility and Ownership Structure on Financial Performance of Consumer Non Cyclicals Companies in Indonesian

This study aims to analyze the influence of corporate social responsibility and ownership structure on financial performance of consumer non-cyclical companies in Indonesian. This study analyzes several variables, namely CSR, institutional ownership, managerial ownership, concentration of ownership, firm age, firm size and leverage to financial performance. This study uses secondary data obtained from the financial statements and annual reports of companies listed on the IDX for the period 2017 - 2022. The collection of research samples was carried out using a purposive sampling method or sampling with certain criteria. There were 33 with 198 observation data coming from 10 sub-industries of Consumer Non Cyclicals Companies. The data analysis used to test the hypothesis is a multiple regression test using eviews 10 software. The results show that CSR and firm age have a positive and significant effect on the financial performance. Meanwhile, institutional ownership, concentration of ownership, firm size and leverage have a negative and significant effect on the financial performance. Managerial ownership has no significant effect on the financial performance. The company should improve programs and policies that implement and integrate corporate social responsibility to company's business, adjusting the percentage of institutional share ownership and concentrated ownership through restructuring the share ownership structure. The company is also expected to reduce the company's leverage value and optimize the use of its assets to carry out profitable investment activities. The results of this study are expected to provide input for companies and investors to consider corporate social responsibility, share ownership structure, firm age, firm size and leverage.

Control-Enhancing Mechanisms in State-Owned Companies – Analysis of Companies Listed on the Warsaw Stock Exchange

Abstract Purpose In countries with a developed economy, including Poland, the state seeks to retain control of enterprises (companies) operating in so-called strategic sectors, such as fuel and energy, chemical industry, transport, and telecommunications infrastructure. Proper control of these entities not only determines the effective implementation of economic policy, but it is also important to ensure the economic sovereignty of the state and public security. The purpose of this study is to identify and analyze control-enhancing mechanisms in SOEs listed on the Warsaw Stock Exchange (WSE), taking into account the division between majority and minority state ownership. Methodology Analysis of documentation. Findings Based on the analysis of statutes and shareholder structures of the investigated entities, it is established that for companies with minority state ownership, the state uses control-enhancing mechanisms to gain effective control of the company. Similar mechanisms are also applied in companies with majority state ownership, where these mechanisms contribute to achieving full control of the company. The most commonly used mechanism is a dominant shareholder status and limitation of voting rights for shareholders other than the state. Originality Apart from state-owned companies, this analysis also included companies indirectly controlled by the state.

Evolution of a commercial insurance company in trans-epochal developments: Evidence of the Czech insurance market

This paper aims to analyze the evolution of the leading commercial insurance company Česká pojišťovna on the Czech insurance market in the years 1947–2021. Its evolution was closely linked to the processes of building socialism in the 1950s and the federalization of Czechoslovakia at the end of the 1960s. The paper uses qualitative research methods, methods of description and comparison, as well as local micro-historical analyses shall be applied. The main features of insurance products in the period of the totalitarian regime are characterized. Both the economic transformation in the 1990s and globalization in the last decades have had a radical effect on the further development of the analyzed company Česká pojišťovna. In the period after 1989, the development is marked by a focus on changes in the shareholder structure of the analyzed insurance company, and the development of its market share is shown. As a result of demonopolization, new companies could emerge, creating a competitive environment. The leading commercial insurance company Česká pojišťovna’s market share gradually began to decline. AcknowledgmentThis paper was supported by the project SGS/24/2022 “Financial stability determinants of the selected financial institutions”.