Since the beginning of this year, a number of brokerages have planned to give back to investors with real money and issued interim dividend announcements, and some brokerages have not yet issued an independent medium-term profit distribution plan, but informed investors of the corresponding medium-term dividend plan through other means.
Compared with previous years, the number of dividend plans of brokerages has increased significantly this year.
Industry insiders said that the performance of brokerages this year is good, which provides a basis for the release of dividend plans. In addition, since the beginning of this year, relevant policies have been introduced one after another, which has also increased the strength of brokerages to give back to investors. With the gradual implementation of the policy, the number and amount of dividends of securities companies are expected to be further expanded in the future.
Nearly 30 brokerages have launched interim dividends
Recently, a number of listed securities companies have issued interim dividend announcements. On June 3, CITIC Securities announced that the company intends to arrange cash dividends in the middle of 2024, and the total dividends account for no more than 40% of the net profit attributable to the parent company realized in the current period.
In addition to CITIC Securities, six brokerages, including China Galaxy, CICC, Shenwan Hongyuan, Huatai Securities, Zhongtai Securities and Huaxin Shares, also stated in the announcement that they would reasonably consider the current performance, capital situation and risk control index requirements, and will implement interim dividends under the condition that there are distributable profits in the first half of 2024, and the total mid-year dividends will account for no more than 30% of the net profit attributable to the parent company realized by the group in the first half of 2024. Among them, Huaxin shares mentioned that the company's interim dividend will be implemented after the disclosure of the 2024 semi-annual report or third quarter report.
In addition, including Guojin Securities, Haitong Securities, Capital Securities, Caitong Securities, Guotai Junan, Guohai Securities, Soochow Securities, Hualin Securities, Zhongtai Securities, Western Securities and many other securities firms, the relevant interim dividend proposals have been approved by the general meeting of shareholders.
There are also brokerages that have not yet issued an independent medium-term profit distribution plan, but have informed investors of the corresponding medium-term dividend plan through other means. In the record of investor relations activities released by Southwest Securities on May 27, some investors mentioned the company's 2024 medium-term dividend plan, and Southwest Securities said that it would implement interim dividends on the basis of audited undistributed profits in 2023 and reasonably consider the current profits.
It is worth mentioning that among the brokerages that have disclosed interim dividends, the upper limit of the dividend ratio determined by Soochow Securities is higher, which is 50% of the net profit attributable to shareholders of the parent company; CITIC Securities and Capital Securities announced that the upper limit of dividends should not exceed 40%; China Securities Construction Investment and Guohai Securities said in the announcement that the interim dividend ratio does not exceed 35%. More brokerages such as CICC, Huatai Securities, China Galaxy Securities, Shenwan Hongyuan, Guotai Junan, Zhongtai Securities, etc., have a dividend limit of 30%.
In addition, the brokerage company clarifies the upper limit of the dividend amount. China Merchants Securities announced that it has requested the general meeting of shareholders to authorize the board of directors to decide on the company's 2024 interim profit distribution plan, with an amount of no more than 880 million yuan. Nanjing Securities said that the total amount of the company's interim cash dividends in 2024 will not exceed the net profit attributable to shareholders of listed companies in the corresponding period, and the maximum amount will not exceed 180 million yuan.
Compared with previous years, the number of brokerages planning to implement interim dividends this year has increased significantly. Wind data shows that in 2023, only one Caitong Securities will implement interim dividends, issuing interim cash dividends of 232 million yuan, while in 2022, there will be two Industrial Securities and Zheshang Securities, which will issue interim cash dividends of 1.554 billion yuan and 659 million yuan respectively; In 2021, there will be 4, namely Zheshang Securities, Guoyuan Securities, Tianfeng Securities and Zhongyuan Securities.
It can be seen that in the past five years, the maximum number of brokerages that carry out interim dividends every year is only 4, and in the first half of this year alone, as many as 26 brokerages have launched medium-term dividend plans or plans.
Performance supports the return of investors
Industry insiders said that the brokerage collective increase in medium-term dividends, on the one hand, means that the overall operation of the brokerage in the first half of the year is good, and the cash is abundant. On the other hand, it also demonstrates the sincerity of brokerages to give back to investors.
In terms of performance, in the first quarter of this year, the performance of many brokerages hit a record high. Wind data shows that 41 listed securities companies achieved revenue of 84.661 billion yuan, a year-on-year increase of 28.17%; The net profit was 40.361 billion yuan, a year-on-year increase of 30.34%. The good performance has laid the foundation for the brokerage to pay cash dividends this year.
In order to repay investors, in the dividend announcements that have been released, a number of brokerages have announced shareholder return plans for the next three years and action plans for "improving quality, efficiency and return". In terms of shareholder return plan, Industrial Securities said that the company's cumulative profits distributed in cash in the next three years (2024 to 2026) will not be less than 30% of the average annual distributable profits realized in the next three years.
Guojin Securities mentioned in its shareholder return plan for the next three years that in addition to major changes in the company's operating environment or operating conditions, if the company's annual reporting period is profitable and the cumulative undistributed profit is positive, the annual profit distributed in cash shall not be less than 10% of the distributable profit realized in the current year.
In the action plan of "improving quality, efficiency and return", Founder Securities mentioned that in order to enhance investors' sense of gain, it will increase the frequency of cash dividends, and on the premise of making a profit in the first half of 2024, it plans to carry out interim cash dividends in 2024. Guotai Junan Securities stated in the "quality and efficiency improvement and return" plan released that the company's board of directors has assessed the feasibility of multiple dividends in accordance with the requirements of regulatory rules for dividends, and authorized the board of directors to formulate a medium-term dividend plan and increase the frequency of dividends.
The policy promotes the increase in dividends
In addition to the reasons for their own business improvement, it also reflects that the guiding role of regulatory policies is gradually emerging, and the market is paying more and more attention to medium-term dividends.
In recent years, the China Securities Regulatory Commission has repeatedly emphasized that listed companies should increase cash dividends to enhance investors' sense of gain. In this context, securities companies take practical actions to convey a friendly attitude to investors and establish a responsible capital market image. Since the beginning of this year, the regulatory authorities have issued a number of policies to encourage listed companies to increase dividends. On March 15, the China Securities Regulatory Commission issued the "Opinions on Strengthening the Supervision of Listed Companies (Trial)", which mentioned that it is necessary to "promote multiple dividends a year" and "guide high-quality large-capitalization listed companies to pay dividends in the medium term and play a leading role".
In the "Several Opinions of the State Council on Strengthening Supervision and Risk Prevention and Promoting the High-quality Development of the Capital Market" (the new "National Nine Articles") issued in April, it is clearly proposed to "enhance the stability, sustainability and predictability of dividends, and promote multiple dividends a year, pre-dividends, and dividends before the Spring Festival", emphasizing increasing incentives for high-quality companies with dividends, and taking multiple measures to promote the increase of dividend yields.
Many industry insiders said that with the further implementation of the policy and the deepening of market understanding, it is expected that more listed securities companies and listed companies will join the ranks of interim dividends in the future. At the same time, with the continuous improvement of the profitability of listed brokerages, the total amount of dividends is expected to further increase.
Source: Financial Times Client Reporter: Li Ziqin Editor: Duan Jiaxi E-mail: [email protected]