The Chinese national flag flies with the Logiazawi Financial Zone in the background.
VCG | China Visual Group Gety pictures
Chinese companies are luring investors through standard profit distribution payments and shares re -purchase amid strict reform of corporate governance, as some market monitors say more on the horizon.
Last year, Chinese companies listed paid a record 2.4 trillion yuan ($ 328 billion) at profits, according to Data from the Chinese Securities Regulatory Committee (CSRC). In addition, companies bought 147.6 billion yuan of stocks-the highest level ever.
Goldman Sachs estimates that the cash distribution of Chinese companies may reach $ 3.5 trillion this year to achieve a new rise, and Kinger Lau, a bank strategic expert, wrote in a note published in early February.
Strategy expert in Asia in Asia Herald van der Lindy chanted similar feelings when he was asked about the horizons of another year of standard stocks.
“I think they will continue,” he said. ”
It is expected that more than 310 dividend distribution companies exceed 340 billion yuan in December 2024 and January alone, which represents a nine -fold leap in the number of companies that pay profits and an increase of 7.6 times in the total payment compared to the same period in the past year, CSRC was added in a statement.
Goldman Sachs data showed that the profit returns on Chinese stocks rose to about 3 %, which is the highest level in nearly a decade.
Chinese stocks with high distribution returns I excelled over that in Asia emerging markets About 15 %, according to index data.
Priority for the government
Van der Linde from HSBC said the Chinese government promotes companies to pay higher returns to shareholders by providing them with tax incentives.
Improving the returns of shareholders became a priority for the State Council and the social responsibility of companies in 2024. Last October, the Chinese Central Bank 300 billion yuan launched The target program to help the listed companies and the main shareholders buy shares. In April 2024, the organizers also strengthened the standards of the stock list, and discovered illegal stock sales, and The regulation of profit payments has strengthened.
In August last year, 677 companies listed from cash dividend distribution plans, an increase of 500 of the same period last year in 2023, Data from the China Society for Public Companies showed.
This is largely driven by Beijing in a step to improve corporate efficiency. When Beijing says jump, the owned by the waves says, “How high?”
Jason Hsu
Rayliant global advisers
State -owned companies. particularly. Ownership I was in the foreground Allianz International indicated that this increase in profit payments and the re -purchase of shares. Some prominent companies include Petrochina, with a Distribution dividends are about 8 %The CNOOC group with 7.54 % return.
“This is greatly led by Beijing in a move to improve the efficiency of companies. Chinese companies with favorable loan prices to finance profit enhancement,” said Jasson Hessa, founder and chairman of the Board of Directors of International Advisers.
Private companies are also increasing their cash payments as well. For example, the e -commerce giant JD.com He agreed to the re -purchase of $ 5 billion over three years in SeptemberIn addition to the payment of profit distributions by 1.9 %.
For companies with special clouds in particular, investors can rely on more standard profit distribution payments, especially from the SOE giant.
However, the percentage of distribution of China’s profits, which measure the profit distributions reached by the shareholders, is still the pure income of the company, is still lagging behind some of its Asian counterparts.
The distribution of Chinese profits reached 52.58 % in late January, According to the data collected by Reuters and Lseg. While the highest of 36.12 % in Japan and 27.6 % of South Korea is still the number of 89.2 % in Australia and Singapore 78.13 %, among other things.
Returning local population to stock markets
Le Chia, the chief economist in Asia at BBVA Research, said that the government’s payment of big profits enhances Chinese stocks in the short term, while attracting investors in the long term from local and external markets.
However, this may also mean more cash payments flowing from China to foreign markets, which may exert some pressure on the Chinese yuan.
The higher profits payments are good to clarify local investors in the short term because there is no “place for the Chinese to keep their money” regardless of gold, aS Sean Rin, Managing Director of the Chinese Market Research Group, said that the real estate and stock market in the country remains in a stagnation.
Feelings about the Chinese economy and markets It was poor in recent years. A preliminary increase in the country’s standard CSI 300, which was ignited by a group of government measures that were presented in September.
“The simple way to look at it, you should pay you enough, Bhaskar Laxminarayan,” said the chief investment employee at Julius Bayer in Asia.
He said that investors are paid for their patience. “If you are not, this is not worth it.”
HSU of Rayliant Global Advisors said that profit distribution profits get money in the hands of families, and attractive revenues will return investors to the stock market-especially those looking for alternatives to low return bank deposits.
HSU said: “The return of a very large victory is paid, while A is a catalyst A, a good trade,” HSU said.
