Multiple Dividends Within a Year—Investors About to Receive Red Envelopes for the Spring Festival from Many Companies

Translated from Yicai

On January 22, six departments including the General Office of the Central Financial Commission jointly issued the Implementation Plan for Promoting Medium and Long-term Capital into the Market, mentioning "implementing a policy of multiple dividend distribution within one year". Recently, many listed companies gave investors red envelopes before the Spring Festival. On January 23, Bank of China Limited issued more than 35.5 billion yuan in cash dividends, including 25.46 billion yuan for A-shares, and the dividend yield from 2021 to 2023 exceeded 4%.

Among the companies that paid dividends before the Spring Festival, many companies such as Industrial and Commercial Bank of China Limited (ICBC) and China Construction Bank Corporation (CCB) had a dividend yield of more than 3% in the past three years. The dividend yield of 186 SSE-listed companies has remained above 3% for three consecutive years, and the annual dividend yield of 45 companies such as Shanxi Coal International Energy Group Co., Ltd. exceeded 5%. These high-dividend companies are mainly concentrated in banking, transportation and other industries.

From 2021 to 2023, the 186 companies paid more than 2.8 trillion yuan in cumulative dividends, with an average annual dividend of 5 billion yuan per company. Ninety percent of companies have continuously paid dividends in the past five years, and nearly 40% of them have paid an average annual dividend of more than 1 billion yuan. The accumulated annual dividends of ICBC exceeded 100 billion yuan for three consecutive years, followed by CCB. Companies such as China Petroleum & Chemical Corporation have paid annual dividends of 40–50 billion yuan. Companies such as Daqin Railway Co., Ltd., Yankuang Energy Group Company Limited and Baoshan Iron & Steel Co., Ltd. paid a mid-term dividend of more than 2 billion yuan in 2024.

At present, the return on equity (ROE) of 186 high-dividend companies is 13%, 9.4 percentage points higher than that of the whole market. The 2024 medium-term dividends of SSE 50 and 180 index companies account for a high proportion of the total dividends of SSE-listed companies. In the past two years, bonus plate shares rose by 17%, outperforming the market by 8.6 percentage points.

Industrial experts said that the high-dividend companies, with better corporate governance, abundant cash flow, good performance and small share price fluctuations, are in line with medium and long-term capital preferences and gradually become attractive to investors. With the promotion of policies, listed companies have increased their dividend distribution ratios and the institutional environment for strengthening shareholder returns has been gradually optimized.

The above information is provided for reference purposes only and does not constitute investment advice.