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Recently, A-share listed companies have frequently announced dividends and buybacks, and the China Securities Regulatory Commission and the stock exchange have also successively issued relevant rules and related content guidelines. So, what kind of information and trends does this series of initiatives and market behaviors convey? Let's find out through the interpretation of journalists and experts.
Dividends are distributed by the company to shareholders in a portion of its net profits, and common dividends include cash dividends and stock dividends. To put it simply, cash dividends are paid directly by the company to shareholders; Stock dividends are the company's distribution of shares to shareholders. A buyback is when the company buys back its own shares in the secondary market with its own money. After the share repurchase, it can be cancelled or used for an incentive plan.
The recent increase in buybacks has led to a new high in total dividends this year
CCTV reporter Dong Bin: We have conducted an in-depth analysis of the buybacks and dividends of A-share listed companies, and the data shows that the recent increase in the number of dividends and buybacks is a trend.
In terms of repurchases, data shows that from the beginning of the year to December 22, the number of A-share listed companies that have completed or are in the process of repurchasing exceeded 1,300, a record high. Not only that, since August, the scale of buybacks of listed companies has been increasing. From August to November, the month-on-month growth of repurchase scale was 27.65%, 10.51%, 12.79% and 20.05% respectively. The enthusiasm of listed companies to repurchase has been increasing.
In terms of dividends, the data shows that the total dividends of A-shares from January to November this year were 2.1 trillion yuan, a record high. According to the 2022 annual report, there are nearly 2,200 companies with cash dividends accounting for more than 30% of net profit, accounting for nearly 43% of the total number of A-share listed companies in the same period. In recent years, the proportion of companies with a high proportion of cash dividends has increased significantly.
Zhang Gang, chief analyst of Southwest Securities: Among the various repurchase methods, some can improve financial indicators such as earnings per share and optimize the company's internal governance, while others will help stabilize the stock price and form a direct benefit to investors. Dividends are also an important source of stable investment income for investors.
Policies and measures have been introduced to improve the level of dividends and the convenience of repurchases
CCTV reporter Dong Bin: We found that in recent months, the China Securities Regulatory Commission (CSRC) and the stock exchange have successively issued policies on dividends and buybacks.
Specifically, in August, in response to reporters' questions, the China Securities Regulatory Commission specifically emphasized enhancing the investment attractiveness of listed companies and better rewarding investors. From the level of specific measures, it is specifically pointed out that "strengthen the dividend orientation and relax the repurchase conditions".
In October, the Shanghai and Shenzhen Stock Exchanges respectively revised the relevant provisions on cash dividends and buybacks on the Main Board, the Science and Technology Innovation Board, and the Growth Enterprise Market. The revision focuses on promoting listed companies to further increase the level of dividends; At the same time, efforts will be made to improve the convenience of share repurchase.
In December, the China Securities Regulatory Commission (CSRC) revised and issued the Guidelines on Cash Dividends and the Guidelines on the Articles of Association, as well as the Rules for Share Buybacks of Listed Companies.
Zhao Yue, Chief Economist of Hong Kong Chief Securities: Since listed companies give investors real returns, it will promote investors to pay more attention to the real business performance of listed companies. Listed companies pay dividends, so that these well-managed, high-yield blue-chip stocks, its valuation back to a reasonable level in the market, will make the value center of the entire index move up rapidly, and the value center of the value is a long-term change that can bring stable returns to investors.
How to implement dividends and repurchases?
CCTV reporter Dong Bin: Dividends and buybacks of listed companies can enhance the sense of gain of the majority of investors, which really helps to fulfill the promise of "better returns to investors".
Not long ago, Baosteel Co., Ltd. announced that it will repurchase the company's A shares with no more than 3 billion yuan of its own funds, and use it for the continuous implementation of equity incentive plans in the future.
Zou Jixin, Chairman of Baoshan Iron and Steel Co., Ltd.: We have also set up a special repurchase working group, and as of December 15, 2023, the company has repurchased a total of 240 million shares, and the total amount paid is close to 1.5 billion, and we will continue to repurchase in the future.
In fact, not only Baosteel, but also Sinopec, Industrial and Commercial Bank of China and many other listed companies are continuing to give back to investors through dividends twice a year and high dividend yields.
Zou Jixin, Chairman of Baoshan Iron and Steel Co., Ltd.: We hope that investors should see the intrinsic value of the company, and enhance investors' confidence in holding shares for a long time through some of our stable dividends and timely repurchases, so as to truly realize the common development of our enterprises and shareholders.
Why should dividends and buybacks be worth paying attention to?
CCTV reporter Dong Bin: Why do dividends and buybacks deserve investors' attention? Because investors' gains in the capital market not only come from changes in stock prices, but also from dividends from listed companies. At the same time, dividends and buybacks also reflect the real operating performance of listed companies and their expectations for their future development.
Yan Xiang, chief economist of Huafu Securities: As far as dividends are concerned, listed companies should achieve a certain level of profitability, and at the same time, they also need to comprehensively consider factors such as the company's operating conditions, cash flow levels, and development needs, so if a listed company can pay stable dividends all year round, it at least means that the company's performance is considerable and its financial condition is good. As far as buybacks are concerned, listed companies pay real money to buy their own stocks, which to a certain extent shows that they have a certain economic strength. In recent years, many companies have chosen to buy back shares to motivate their teams, which also shows that they have confidence in the future development.
Focusing on dividends and buybacks can help achieve long-term value investment
CCTV reporter Dong Bin: In fact, dividends and buybacks are also important components of long-term value investment that we have been advocating. This is because long-term value investing is about sharing the future value appreciation of the company's long-term growth, rather than short-term price fluctuations and speculation. Long-term value investment can not only be reflected in the continuous improvement of the company's operating conditions, but also in the company's continuous creation of stable dividend income for shareholders. The repurchase itself shows that the company has positive expectations for its own long-term development, and sends a positive signal to the majority of investors.