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Source: China Newsweek
Recently, under the public pressure of receiving the inquiry letter from the Exchange and being referred to as the "iron rooster", a company that has been listed for 14 years changed its mind and adjusted its profit distribution plan for 2023: from "no cash dividends" to "plans to allocate more than 170 million yuan for cash dividends".
On April 12, the new "National Nine Rules" of the capital market were implemented. In Article 3 "Strict continuous supervision of listed companies", it is proposed to strengthen the supervision of cash dividends of listed companies. Subsequently, the Shanghai and Shenzhen Stock Exchanges issued a draft for comments, and proposed to take strong restrictive measures against the non conformance of dividends - including companies that have not paid dividends for many years or have a low proportion of dividends into the "implementation of other risk warnings" (ST).
Under the new dividend rules, A-share listed companies that fail to meet the dividend standards are faced with supervision and public opinion. "Some 'Iron Rooster' companies, ignoring the interests of small and medium-sized investors, have not paid dividends for a long time, while some 'Immortal Bird' companies do not have the ability to pay dividends and make profits, but have remained in the market because they have not triggered delisting conditions." Yang Delong, chief economist of Qianhai Kaiyuan Fund, told China News Weekly.
The new dividend rules have forced listed companies to pay dividends. Companies that have not paid dividends for many years have adjusted their dividend plans after receiving the inquiry letter from the Exchange, and some companies have actively announced that they plan to pay dividends four times in a year.
"This new dividend policy is not to guide investors to one-sided evaluate the company's investment value through dividend distribution, but to strengthen dividend supervision as a means to promote listed companies to strengthen business layout, long-term development planning, and protect the interests of investors at the same time." Tian Xuan, vice president of Wudaokou School of Finance, Tsinghua University, told China News Weekly.
Figure/Vision China "Iron Rooster" attitude reversal
On April 12, Jilin Expressway The disclosure of 2023 annual report and profit distribution plan indicates that the company plans not to distribute profits, cash dividends, share dividends and capital reserve conversion to share capital, and the retained undistributed profits will be used for the company's daily operation and development, investment, debt repayment, etc.
In response to this plan, on the evening of April 14, Shanghai Stock Exchange issued a regulatory inquiry letter, requiring it to supplement the reasons and rationality of no or little cash dividends for consecutive years, and to reply in writing within 5 working days and fulfill the obligation of trust.
The Shanghai Stock Exchange pointed out that the company has made profits for five consecutive years from 2019 to 2023, with profit growth for three consecutive years, and only a low proportion dividend of 32.4095 million yuan in 2021; In addition, the company's asset liability ratio has also declined for many consecutive years, and the ending undistributed profits have increased for many consecutive years. The ending monetary capital balance has reached 1.5 billion yuan.
Jilin Expressway was listed in March 2010. Wind data shows that the company has distributed dividends for 10 times since its listing. In 2023, the company will achieve revenue of 1.447 billion yuan, a year-on-year decrease of 0.82%; The net profit was 546 million yuan, up 38.84% year on year. The actual controller of the company is Jilin Provincial Department of Transport, and the largest shareholder is Jilin Provincial Expressway Group Co., Ltd., which held 54.35% of the shares by the end of last year.
The disagreement of the directors, supervisors and senior executives was also concerned. In the resolution of the Board of Supervisors, the dividend plan obtained 1 abstention; In the resolution of the Board of Directors, Vice Chairman Liu Xianfu and independent director Lin Jianzhong abstained 2 votes. "The company should also consider shareholders' immediate cash return requirements while meeting long-term development capital needs," Liu Xianfu said. At present, he is the senior consultant of China Merchants Highway Network Technology Holdings Co., Ltd., the second largest shareholder of Jilin Expressway, with a shareholding of 14.04%.
Investors have been waiting for dividends for a long time. Since the beginning of the year Eastmoney Jilin high-speed stock bar "ask the board secretary" plate, the company's dividend ability and plan continued to receive attention. "Does high-quality development mean that we can't share a high proportion of dividends?" "The dividend rate of excellent companies in the expressway sector is 70%, but the dividend level of the company has been very low in the past, and the sense of return on investment is far from enough." The shareholders wrote.
The event soon ushered in a reversal. On April 18, Jilin Expressway announced that it planned to adjust the profit distribution plan for 2023. After the adjustment, it planned to distribute a cash dividend of RMB 0.90 (tax included) per 10 shares, a total of RMB 170 million in cash dividends, with a cash dividend ratio of 31.14%. The cash dividends needed would be paid by working capital.
"The Shanghai Stock Exchange's inquiry on Jilin Expressway is the first signal released to the market against the background of the new dividend rules, guiding listed companies to prudently evaluate their operating conditions and capital utilization, actively carry out cash dividends, and effectively protect the interests of investors." Tian Xuan, vice president of the Wudaokou School of Finance of Tsinghua University, said.
On April 12, the State Council issued the new "National Ninth Article", which strengthened the supervision of cash dividends of listed companies in Article 3 "Strict continuous supervision of listed companies". It is mentioned that for companies that have not paid dividends for many years or have a low proportion of dividends, major shareholders are limited to reduce their holdings and implement risk warnings; Increase the incentive for high-quality dividend companies, and take multiple measures to promote the improvement of dividend yield; Enhance the stability, sustainability and predictability of dividend distribution, and promote multiple dividend distribution, pre dividend distribution and dividend distribution before the Spring Festival.
The Shanghai Stock Exchange and Shenzhen Stock Exchange subsequently issued the corresponding draft for comments, taking strong restrictive measures against the dividend not meeting the standard, with the focus on incorporating companies that have not paid dividends for many years or whose dividend ratio is low into the ST situation. For the main board of Shanghai and Shenzhen, ST will be implemented for companies that meet the basic conditions for dividend distribution, whose total cumulative cash dividends in the last three fiscal years are less than 30% of the average annual net profit, and whose cumulative dividend amount is less than 50 million yuan; In terms of the Science and Technology Innovation Board and the GEM, the absolute value standard of the dividend amount was further reduced to 30 million yuan, taking into account the exemption of ST from R&D investment.
"At present, the requirements of the new regulations are not high, and the development needs of enterprises have been fully considered." Tian Xuan commented.
"The new dividend rules will standardize the dividend decisions of listed companies. In the future, companies willing to share cash dividends with ordinary investors may enjoy valuation premiums; companies that have not paid dividends for a long time may face valuation discounts, and investors will also 'vote with their feet' after a long time." Yang Delong, chief economist of Qianhai Kaiyuan Fund, told China News Weekly.
The above new rules on cash dividends will be officially implemented from January 1, 2025, and the "last three accounting years" applicable to the new rules will be from 2022 to 2024.
On April 16, Guo Ruiming, Director of the Department of Listed Company Supervision of the CSRC, said that according to the calculation, the number of companies that will be delisted in the Shanghai and Shenzhen Stock Exchanges in the next year is expected to be about 30, and about 100 companies that may touch the index and implement delisting risk warnings next year. "These companies still have more than a year and a half to improve their operation and quality, and will not be delisted until they still fail to meet the standards by the end of 2025."
State owned enterprises' dividend "lead"
Before and after the hot debate on Jilin Expressway, some listed companies have made more sensitive adjustments.
Fangda special steel It is the first listed company to change its profit distribution plan from "no dividend" to "dividend" in 2024. On March 16, Fangda Special Steel reviewed and approved the plan, and planned not to carry out cash dividend, stock dividend distribution or capital reserve conversion to share capital; On March 29, the Shanghai Stock Exchange sent an inquiry letter, asking it to explain the reasons and rationality of not paying cash dividends for two consecutive years against the background of high monetary capital balance and years of profitability; On April 9, Fangda Special Steel announced the adjustment plan and planned to distribute cash dividends of 0.10 yuan (tax included) per share to all shareholders.
Wind data shows that according to the disclosure of the current annual report and plan, as of April 21, a total of 47 listed companies have not paid dividends from 2018 to 2022, and have announced to pay dividends in 2023, such as Suneng 、 CIMC Environmental Science 、 Haikan Shares 、 Jidian Etc.
In addition, A-share also emerged as the first listed company to announce plans to pay dividends four times a year. On April 19, March 7th mutual entertainment (Rights protection) The annual report and profit distribution plan for 2023 were released. It was proposed to distribute cash dividends of RMB 3.70 (tax included) per 10 shares to all shareholders, with the dividend amount expected to be RMB 820 million. It was proposed to increase the dividend frequency from once half a year to once every quarter.
From the perspective of investment, the investment research team of Hexu Zhiyuan Fund said that with the improvement of the market dividend level, the overall investment expectation will also increase, and dividend will be an important part of investment income.
It is worth noting that compared with Jilin Expressway, in the history of A-share, companies with more "stingy" dividends are everywhere.
According to the statistics of China News Weekly, as of April 21, there were 2369 companies listed for 10 years or more in the A-share market, according to the data of Oriental Fortune Choice. Among them, 220 companies have not paid cash dividends for 10 consecutive years or more, and 91 companies have not paid cash dividends for 20 consecutive years or more, Jinbei Auto 、 Zhongyida 、 Yangmei Chemical 、 University education Four companies have not paid cash dividends for 30 consecutive years or more. Another 20 companies have never paid cash dividends since listing.
Both Jinbei Auto and Yangmei Chemical have received questions about dividend distribution in the process of applying for non-public offering of shares. In 2017, the CSRC pointed out that Yangmei Chemical had not paid cash dividends for a long time after listing, except for the cash dividend of 10.94 million yuan in 1994, and required it to explain. The company replied, "The reason is that the undistributed profits have been negative for a long time, and large-scale borrowing has a double-sided effect on the company's operation".
In 2019, the CSRC pointed out that Jinbei Auto had never paid cash dividends since its listing in July 1992, and asked it to explain the reasons and rationality. The company replied that "due to investment losses and business difficulties in the historical period, the company's undistributed profits have been negative for a long time". Jinbei Auto said in other announcements that "the company will be committed to improving its operating performance and realizing cash dividends to investors as soon as possible", which has not yet been realized.
"Before, the overall dividend distribution in the A-share market was really weak. According to statistics, about a quarter of listed companies had not taken dividend measures in the past three years, and listed companies that took dividend distribution had a low proportion and small amount of dividends." Tian Xuan said that part of the reason was that some companies could not improve their sustainable profitability, and some companies were even in a period of continuous loss, which did not meet the dividend conditions; Another part of the reason is that the previous regulation mainly guided the dividend provisions, and the mandatory requirements were insufficient, especially the listed companies' profitability, historical dividend situation, dividend ratio, etc. were not related.
"Companies that have not paid dividends in 10, 20 or even 30 years can still stay in the stock market because the delisting mechanism and dividend regulation have not been effectively linked, and the delisting treatment of enterprises that have not paid dividends is not enough," he said.
According to the company's announcement, among the 220 companies that have not paid dividends for 10 consecutive years or more, the management department of small and medium-sized board companies of Shenzhen Stock Exchange has asked 10 companies about matters that have not paid cash dividends for many years, such as in 2017 Beinmei Inquiries in 2018 Jared (Rights protection) . People are happy Xinhua City 、 Zhongrun Resources (Rights protection) Inquiries in 2019 Annie Shares (Rights protection) 、 Shenke Shares 、 GCL Integration 、 Sante cableway (Rights protection) Inquiries in 2020 Huiyuan Communication 。
In contrast to the "generous" dividend distribution of listed companies, Wind data shows that in the decade from 2013 to 2022, there were 848 listed companies that paid cash dividends 10 times or more. Among them, Ping An, China 、 PetroChina 、 Weichai Power 、 SINOPEC (China Petrochemical Corporation 、 GAC Group Five companies have paid cash dividends for more than 20 times.
In terms of total dividends, there are 20 listed companies with total dividends of more than 100 billion yuan in ten years, mainly state-owned enterprises, concentrated in banking, energy, food and beverage and other industries. "The development of such industries is relatively stable, and the general operating conditions of state-owned enterprises in these fields are also relatively stable, with strong profitability, and the dividend level can be expected," Tian Xuan commented.
"For example, medicine, science and technology, high-end manufacturing and other fields are in a rapid development stage, and listed companies have not yet had stable profitability, and the demand for funds for subsequent development is large. Therefore, it is necessary to consider the characteristics of enterprises in different industries, different attributes, and different stages, further refine the dividend policy, and strengthen the differentiated requirements for dividend distribution of different enterprises." He said.
As of April 21, Jinbei Auto, Zhongyida, Yangmei Chemical and Xueda Education had not paid cash dividends for 30 consecutive years or more. Figure/Vision China Avoid misreading
Recently, the Opinions on Strictly Implementing the Delisting System issued by the CSRC on April 12 also came into force. At the same time, some misleading rumors are also fermenting in the market, including misreading of the rules and exaggeration of the impact of the rules. On April 16, Guo Ruiming, Director of the Department of Listed Company Supervision of the CSRC, made a speech on issues related to dividend distribution and delisting.
It is rumored that according to the amount standard of the new dividend rules, it is inferred that more than 1000 companies in A-share will be marked as ST due to the low dividend amount. Guo Ruiming reiterated the meaning, implementation and trigger conditions of ST, and said that, based on the data from 2020 to 2022, there are only more than 80 companies in Shanghai and Shenzhen stock markets that may touch the standard.
There is also a view that the new delisting rules will have a greater impact on the trend of small cap stocks. Guo Ruiming said that this view was simply a misreading. "This delisting indicator adjustment is intended to increase efforts to eliminate 'zombie shells' and' black sheep ', not' small cap stocks'. It has made sound arrangements in terms of standard setting, transition period arrangements, etc., and will not impact the market in the short term."
"Any reform will have a certain impact on the stock. On the whole, the new rules will have a long-term positive impact on the market. The short-term concern is the liquidity risk caused by irrational convergence transactions." The investment research team of Hexu Zhiyuan Fund said that investors should actively face the new rules and more accurately judge the value of listed companies. Different companies have different situations, It should not be simply understood as a negative for small market capitalization.
In addition, the interviewed experts also reminded that a listed company should not be judged excessively and unilaterally based on the "dividend" standard. "Dividend distribution is only one aspect of measuring the profitability of an enterprise, and it also needs to be judged comprehensively based on the company's industry position, asset liability ratio, undistributed profits, repurchase situation, return on net assets, financing situation and other indicators." Yang Delong said.
Tian Xuan said that the criteria for evaluating enterprise quality also include the company's industry attributes, capital structure, innovation level, corporate governance quality, sustainable development ability, etc. In his view, a healthy stock market needs to be continuously improved in terms of listing, market transaction, delisting mechanism, continuous supervision, listed company governance, etc., to form a market ecology of survival of the fittest. "The relationship between investors and listed companies should be stable and healthy, with long-term investment and continuous dividend distribution."
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