Under the guidance of the supervision department via multi-measures, the cash dividend distribution situation of Shenzhen listed companies has been improved continuously, with the proportion of cash dividend in net profit and the number of Shenzhen listed companies distributing cash dividend increasing year by year. Statistics show that Shenzhen listed companies realized accumulated cash dividend of CNY391.082 billion from 2013 to 2015, and the number of Shenzhen listed companies distributing cash dividend had occupied over 70 percent of the total number of Shenzhen listed companies.
Cash dividend is not only one of the main ways for investors of listed companies to gain return, but also an important way for cultivating investors’ long-term investment philosophy and making the capital market more attractive. After China Securities Regulatory Commission (‘CSRC’) promulgated the Guidelines No. 3 on the Supervision and Administration of Listed Companies – Distribution of Cash Dividends of Listed Companies in 2013, CSRC, Ministry of Finance and State-owned Assets Supervision and Administration Commission (‘SASAC’) jointly released relevant notice in 2015 to actively encourage listed companies to distribute cash dividend. Shenzhen Stock Exchange (‘SZSE’) has actively implemented measures made by the CSRC and the ministries and commissions under the State Council, and regulated and guided the cash dividend distribution of listed companies via the Guidelines on Standard Operation of Listed Companies, so as to enhance the awareness of listed companies on shareholder return.
SZSE always attaches importance to regulating and guiding the cash dividend distribution of listed companies, and has achieved demonstrable results. Statistics show that the cash dividend distribution situation of Shenzhen listed companies has been improved continuously from 2013 to 2015, with the total amount of cash dividend, the proportion of cash dividend in net profit and the average amount of cash dividend increasing year by year. From 2013 to 2015, the total amount of cash dividend is CNY92.738 billion, CNY111.078 billion and 153.216 billion respectively, the average proportion of cash dividend in net profit is 30.51%, 32.31% and 36.39% respectively, and the average amount of cash dividend is CNY78 million, CNY93 million and CNY 125 million respectively.
From 2013 to 2015, there were many listed companies implementing cash dividend continuously and stably. A total of 915 listed companies distributed cash dividend for consecutive three years, accounting for over 50 percent of the number of Shenzhen listed companies, the proportion of cash dividend in net profit of 236 listed companies was more than 30%, and the proportion of cash dividend in net profit of 60 listed companies was more than 50%. The proportion of cash dividend in net profit of Chiwan Wharf and Luzhou Lao Jiao has been more than 50% for consecutive ten years, and Vanke-A has distributed cash dividend every year since its listing with the accumulated cash dividend of CNY26.893 billion, accounting for 19.90% in the accumulated net profit.
Cash dividend varies in different boards and different sectors of the stock market.
Judging from different boards of the stock market, in 2015, the ratio is higher for companies listed on the SMEs board and ChiNext board to distribute cash dividend, while the total and average amount of cash dividend and its percentage in net profit are more prominent among main-board listed companies. The total amount of cash dividend distributed by main-board listed companies over the last three years exceeds that of equity financing. Meanwhile, the average cash dividend distributed by SMEs board and ChiNext board listed companies is increasing year by year, which shows that the market has fostered a group of relatively mature blue-chip companies. Though there is a large capital demand on the part of growing SMEs and start-ups, they have shown a fairly strong willingness to distribute cash dividend.
Judging from different sectors, total cash dividend distributed in the household appliance, real estate, non-bank financial, food and beverage and biomedical industries tops the list, amounting to CNY76.313 billion, accounting for 49.81% of the total cash dividend distributed in the Shenzhen stock market. Over the past three years, 74% of the cash dividend distributed in the household appliance industry and 8.4% in the Shenzhen stock market was distributed by Gree and Midea. Moreover, the portion of cash dividend in net profit is higher in non-ferrous, construction materials, food and beverage, household appliance and machinery industries. The financial sector ranks the top in terms of average cash dividend distributed, closely followed by the household appliance, food and beverage, and the real estate industries.
The annual report provides an important window for distribution of cash dividend by listed companies. As of 24 March, 405 listed companies in the Shenzhen Stock Market have disclosed plans for profit distribution, among which, 343 companies have plans to distribute cash dividend. The total cash dividend to be distributed by PingAn Bank, Shuanghui, SCPH and Wen's Foodstuff amounts to over CNY1 billion. Furthermore, cash dividend this year grows dramatically for companies such as Zhenghai Magnetic Material, Changbao Steeltube and Sanhua, with a year-on-year increase of 451%, 400%, and 200% respectively.
The person in charge of the Shenzhen Stock Exchange expressed that the Exchange shall continue to promote and regulate cash dividend distributed by listed companies on the basis of information disclosure. The Exchange shall enhance supervision and regulation on irregularities such as no cash dividend or minimum cash dividend or conducts to hype up the market via high cash or stock bonus. It shall further optimize the allocation of capital market resources via the market transmission mechanism, so as to create a win-win situation for the listed companies, investors and other parties in the market.