Following Xinhua Insurance, Chinese Insurance and Chinese Life announced on the same day that they intend to implement interim dividends in 2024.
On June 26, Chinese People's Insurance Group Co., Ltd. (hereinafter referred to as "Chinese Insurance") issued an announcement that in order to implement the State Council's "Several Opinions on Strengthening Supervision and Risk Prevention and Promoting the High-quality Development of the Capital Market", further enhance the stability, sustainability and predictability of cash dividends, increase the frequency of cash dividends, enable investors to share the company's development dividends in a timely manner, and enhance their sense of gain, it is planned to implement medium-term dividends in 2024.
Chinese Insurance Company said that in accordance with the relevant provisions of the Company's Articles of Association and the results of the first half of 2024, it will formulate a specific medium-term dividend plan based on factors such as profit level, shareholder return and solvency, and submit it to the board of directors and the general meeting of shareholders for consideration.
On the same day, Chinese Life Insurance Co., Ltd. (hereinafter referred to as "Chinese Life") issued an announcement on the resolution of the 40th meeting of the seventh board of directors, in which the "Proposal on the Relevant Arrangements for the Company's 2024 Interim Profit Distribution" was deliberated and approved.
Chinese Life said that according to the reviewed company's financial report for the first half of 2024, reasonably considering factors such as current performance, solvency level, capital situation, etc., under the condition that the company has distributable profits in the first half of 2024, cash dividends will be distributed to all shareholders, and the total interim cash dividends will not account for more than 30% of the net profit attributable to shareholders of the parent company in the half year of 2024. The specific amount of interim profit distribution in 2024 will be determined in accordance with relevant arrangements, combined with the actual operating results in the first half of 2024, solvency impact and other factors, and will be implemented in accordance with relevant laws and regulations and the relevant provisions of the Articles of Association of the Company after fulfilling the corporate governance procedures. When the follow-up company formulates the 2024 annual profit distribution plan, it will take into account the amount of interim profit distribution that has been distributed.
The Financial Times reporter noted that after the release of the new "National Nine Articles" in the capital market, A-share listed insurance companies ushered in a "small climax" of medium-term dividends. Previously, the announcement of the resolution of the board of directors disclosed by New China Life Insurance Co., Ltd. showed that according to the reviewed financial report for the first half of 2024, the interim dividend payment for 2024 will be implemented under the condition that the company has distributable profits in the first half of 2024, reasonably considering the requirements of current performance, capital situation and risk control indicators.
On April 12, the State Council issued the "Several Opinions on Strengthening Supervision and Preventing Risks and Promoting the High-quality Development of the Capital Market", namely the new "National Nine Articles". The document pointed out that it is necessary to strengthen the supervision of cash dividends of listed companies. For companies that have not paid dividends for many years or have a low proportion of dividends, major shareholders are restricted from reducing their holdings and risk warnings are implemented. At the same time, it is necessary to increase incentives for high-quality companies with dividends, and take multiple measures to promote the increase in dividend yields. Enhance the stability, sustainability and predictability of dividends, and promote multiple dividends a year, pre-dividends, and dividends before the Spring Festival.
In fact, before New China Insurance, Ping An had been distributing interim and annual profits among A-share listed insurers for more than 10 consecutive years. In March 2024, Ping An announced that it would adhere to a stable and sustainable cash dividend policy and firmly establish a sense of rewarding shareholders. In 2024, the company will continue to maintain the frequency of cash dividends, share the company's high-quality development achievements with investors, and effectively enhance investors' sense of gain.
Analysts at Ping An Securities pointed out that long-term and stable cash dividends are an important symbol to measure the investment value of listed companies and an important means for investors to invest in the stock market to obtain returns. Since continuous cash dividends need to be supported by stable corporate earnings, companies that can achieve long-term cash dividends are actually often companies with strong profitability and excellent fundamentals.
For listed companies, increasing the intensity and frequency of cash dividends can improve the efficiency of the use of funds, and increase the attractiveness of investment for investors seeking stable cash flow returns. At the same time, it can also enhance the confidence of market investors in the profitability and financial health of listed companies. At present, the logic underpinning the A-share valuation system has changed, investors pay more attention to the stable operating cash flow and shareholder returns of listed companies, and the investment cost performance of listed companies with high dividend characteristics in the current economic environment is more prominent.
Source: Financial Times Client Reporter: Dai Mengxi Editor: Liu Nengjing Email: [email protected]