The total dividend of A-shares in 2020 is 1.52 trillion yuan, a new high in nearly three years-
why listed companies prefer cash dividends
reporter Zhou Lin Ma Chunyang
Recently, A-share listed companies have shown excellent answers, and more than 70% of listed companies have stated in their 2020 annual reports that they will return cash dividends to shareholders.
Data show that as of April 30, 4246 A-share listed companies disclosed their 2020 annual reports, with a total operating income of 53.07 trillion yuan and a total net profit attributable to shareholders of the parent company of 3.98 trillion yuan, an increase of 2.45% and 4.63% year-on-year respectively.
Among them, 3003 companies in Shanghai and Shenzhen have issued cash dividend plans, accounting for about 70% of the total number of A-share listed companies. The cumulative total dividends are 1.52 trillion yuan (including the quarterly, semi-annual, and annual dividends of the year), compared to 1.36 in 2019 One trillion yuan increased by nearly 12%, a record high in the past three years.
The dividend ratio of White Horse shares has increased significantly
The dividends of A-share listed companies present the following characteristics: First, cash dividends become the standard distribution of listed companies’ annual profit distribution in 2020. There are 194 A-share listed companies with a total dividend of more than 1 billion yuan, of which 24 companies have a total dividend of more than 10 billion yuan. .
ICBC aspires to be the "dividend king" with a scale of 94.804 billion yuan, followed by China Construction Bank (81.504 billion yuan), Agricultural Bank (64.782 billion yuan), and Bank of China (57.994 billion yuan). The total cash dividends/net profit attributable to the parent) are maintained at around 30%.
Benefiting from the overall sound performance and rising stock prices, some state-owned enterprises and state-owned enterprises that have been listed will have a substantial increase in the dividend ratio in 2020. China Shenhua, PetroChina, and Yangtze Power are among the top 30 A-shares in total annual dividends.
Baima shares are enthusiastic about dividends. Kweichow Moutai has accumulated 24.236 billion yuan in cash dividends in 2020, with a dividend rate of 51.9%.
Li Qilin, director of the Hongta Securities Research Institute, believes that, on the whole, the scale of dividends paid by listed companies has increased significantly, conveying to the market signals of stable business operations and strong profitability, and increasing market confidence in corporate development.
From 2017 to 2019, the share price of companies that have paid dividends for three consecutive years has increased by more than 13 percentage points than the share price of companies that have not paid dividends for three consecutive years.
Cash dividend rate is close to the international level
In recent years, driven by policy guidance and supervision, there have been fewer and fewer "iron rooster" companies in the A-share market, and the cash dividend mechanism has been gradually improved.
Gao Li, a spokesperson for the China Securities Regulatory Commission, said recently that the cash dividend rate of listed companies in my country has stabilized at more than 30%, and the average dividend rate is above 2%, which is basically the same as the international level.
In 2020, the cash dividends (including share repurchases) of listed companies will increase four times compared with 10 years ago.
Dong Zhongyun, chief economist of AVIC Securities, believes that cash dividends for listed companies are one of the basic systems of the capital market, which is a manifestation of protecting investor rights and strengthening shareholder returns. Improving the dividend system can effectively enhance the investment function of the capital market and attract long-term funds. Entering the market and promoting the continuous and stable cash dividend distribution of listed companies is also one of the ways to effectively improve the quality of listed companies.
"With the long-term efforts of the regulatory authorities, the dividends of listed companies have increased year by year. The current financing conditions are linked to the dividends. If companies want to expand their business scope through refinancing, they must pay attention to the proportion of cash dividends. Increased dividends will inevitably enhance investors' long-term shareholding. Confidence, promote the concept of value investment to further penetrate the hearts of the people, thereby promoting the improvement of the quality of listed companies and promoting the high-quality development of the capital market." said Kang Chongli, head of the Yuekai Securities Research Institute.
Gao Li said that in the next step, the China Securities Regulatory Commission will continue to improve the system, guide listed companies to repay investors through cash dividends, share repurchases, etc., based on their own development stage and capital status, and strengthen the long-term investment philosophy, so that the dividends of listed companies will become investors’ "New channels" for economic growth dividends.
Multi-party market achieves a win-win situation
Dividends of listed companies are inseparable from the combined effects of operating performance, investors, management and other factors.
Deng Haiqing, chief investment officer of AVIC Fund, said that since the second half of 2020, the total profits of A-share listed companies have increased significantly, and more low-value companies hope to gain market recognition through high dividends and other means.
Dividend ratio and sustainability are important factors for investors to measure listed companies. Dividends can show the business health of the company, attract long-term capital and value investors, and facilitate corporate financing.
Dong Zhongyun said that since last year, the awareness of dividends of listed companies has generally increased, hoping to return cash dividends to shareholders so that investors can recognize the value of the company.
Li Qilin believes that long-term funds in the A-share market prefer companies with stable profits and high dividends, and that companies' increased dividends will help attract long-term funds.
Deng Haiqing said that from an international perspective, mature markets have clear regulations on corporate dividends, and an increase in dividends will help reduce stock price fluctuations.
"Social security funds, insurance funds and other medium and long-term funds need dividend income to meet long-term cash flow needs. With the increase in dividends of listed companies, long-term investment funds can avoid selling shares to obtain funds." Deng Haiqing said.
Looking forward to the future, Dong Zhongyun believes that with the continuous advancement of policies and the further improvement of the quality of listed companies, the cash dividends of listed companies are expected to maintain a growth trend in the future, which will play an important role in maintaining the healthy development of the capital market.