Group12 Report

Group 12 - Cross Shareholding

Proposal

Poster

Application

Report

Executive Summary

Cross shareholding is a situation in which a corporation owns stock in another company. So, technically, corporations own securities issued by other corporations. Cross shareholding can lead to double counting, whereby the equity of each company is counted twice when determining value. When double counting occurs, the security's value is counted twice, which can result in estimating the wrong value of the two companies.

Cross shareholding is very common in corporate world. Sometimes, there can be more than 10 companies involved and it is very difficult for investors and regulators to track who owns how much.

In this project, our group choose 1 or 2 big groups of companies from Korea and China with heavy cross shareholding between each other and conduct visualization and relationship analysis on their networks using R-Shiny so that people can have better picture of these companies’ network and easier to understand relationship between companies.

Background

The stock markets are not the same across the countries. In China, there are two stock markets, one is in Shanghai and the other is in Shenzhen. However, there are only one stock market in Korea. According to what learnt from visualization class, our group decided to do the visualization analysis for the top stocks listed in China and Korea. We choose the top 5 companies in China which are Industrial and Commercial Bank, PetroChina, Agricultural Bank, Bank of China, and PingAn insurance. For Korea, we choose Samsung group as the analyzed target.

However, after go though all the data, our group found that the Stocks in China could not show things straight forward to us. We found only several big national companies hold the share of the top 5 companies. In contrast, Samsung group provide a better view of the visualization, which we can find many loops between several stocks.

Finally, our group will only focus on the Samsung group visualization.

Data Preparation

China Stock Market

There are more than one hundred thousands of stocks list in China Stock Market. For the analysis purpose, our group just do the top 5 companies in China. The distribution of the top 10 stocks in China displayed as below screenshot. The top five stocks list in China are Industrial and Commercial Bank, PetroChina, Agricultural Bank, Bank of China, and PingAn insurance. Three out of five are banks(ICBC, ABC, BOC). The other two is insurance and petro. The proportions of these five companies are around 17% out of all China stock market values. The top 10 companies proportion is around 25% out of all China stock market value.

For the data preparation of the China stock, we got the datasets from OneDriver in SMU library. We download the stock profiles, shareholders, equity, and other datasets and the time period is about 20 years. In the dataset, we joint all the table together and make the final sheet like following table.

Match Flag Stkcd-Stock Code Reptdt-Announcement Deadline Date Equity Equity Size S0301a_en-Shareholder Name S0302a-Year-End Shareholding S0303a-Share Pledged; Frozen Or Under Custody Sign S0304a-Holding Percentage (%) S0305a_en-Share Nature S0306a-Shareholder Rank Tag Stknme_en-Stock Acronym In English Stktype-Stock Type Crcd-A/B/H Share Cross Code Repttype-Announcement Type Reptdt Conmee-Company Name In English Coensnm-Company Acronym In English Nnindnme_en-Industry Name C Nnindcd-Industry Name B Nindnme_en-Industry Name B Nindcd-Industry Code B Indnme_en-Industry Name A Indcd-Industry Code A Regcap-Registered Capital(CNY) 3 601288 30/06/2017 1.32208E+12 61 Central Huijin Investment Ltd. 1.30E+11 2 40.03 Negotiable A Share 1 huijin NYYH A 1288 1 31/12/2015 Agricultural Bank of China Limited ABC Monetary Financial Service J66 State-controlled Commercial Banks I0110 Finance 1 3.25E+11 3 601288 30/06/2017 1.32208E+12 61 Ministry of Finance of the People's Republic of China 1.27E+11 2 39.21 Negotiable A Share 2 other NYYH A 1288 1 31/12/2015 Agricultural Bank of China Limited ABC Monetary Financial Service J66 State-controlled Commercial Banks I0110 Finance 1 3.25E+11 3 601288 30/06/2017 1.32208E+12 61 HKSCC Nominees Limited 30533258356 3 9.4 Negotiable H Share 3 hongkong NYYH A 1288 1 31/12/2015 Agricultural Bank of China Limited ABC Monetary Financial Service J66 State-controlled Commercial Banks I0110 Finance 1 3.25E+11 3 601288 30/06/2017 1.32208E+12 61 National Council for Social Security Fund 9797058826 2 3.02 Negotiable A Share 4 other NYYH A 1288 1 31/12/2015 Agricultural Bank of China Limited ABC Monetary Financial Service J66 State-controlled Commercial Banks I0110 Finance 1 3.25E+11 3 601288 30/06/2017 1.32208E+12 61 China Securities Finance Corporation Limited 5946244132 2 1.83 Negotiable A Share 5 other NYYH A 1288 1 31/12/2015 Agricultural Bank of China Limited ABC Monetary Financial Service J66 State-controlled Commercial Banks I0110 Finance 1 3.25E+11 3 601288 30/06/2017 1.32208E+12 61 Central Huijin Asset Management Co., Ltd. 1255434700 2 0.39 Negotiable A Share 6 huijin NYYH A 1288 1 31/12/2015 Agricultural Bank of China Limited ABC Monetary Financial Service J66 State-controlled Commercial Banks I0110 Finance 1 3.25E+11

Korea Stock Market

There are nearly eight hundred of stocks list in Korea Stock Market. For the analysis purpose, our group just analysis the Samsung group in Korea.