A-share cash dividends soar 166%, boosting appeal for long-term capital

It has become an increasingly common phenomenon for China's listed companies to offer mid-term cash dividends, as statistics released by Wind Data show. As of Wednesday, 940 listed companies had launched 994 mid-term cash dividend plans, a year-on-year increase of 269.41 percent, the Securities Daily reported on Thursday.

The total amount involved in these dividend plans reached 667.52 billion yuan ($91.85 billion), a year-on-year increase of 166.24 percent, the report said.

Wind Data shows that as of Wednesday, 29 A-share companies have disclosed interim or third quarter cash dividend plans this month, reflecting a growing trend of mid-year payouts beyond annual dividends.

"Dividends are a key source of returns for investors and the most fundamental responsibility of listed companies. Consistent payouts help attract investors who seek stable cash flow," Zhao Xijun, co-president of the China Capital Market Research Institute at the Renmin University of China, told the Global Times on Thursday.

Since the beginning of 2024, listed companies in China have been actively launching mid-term cash dividend plans. In terms of industry, banks, oil and petrochemicals, and telecommunications take the lead in dividend amounts, while machinery, pharmaceuticals, and basic chemicals have the highest number of dividend-paying companies.

Zhao said that these companies with active dividend payouts often demonstrate strong profitability, robust cash flow, and leading positions in their industries. "Active interim dividends by listed companies strengthen investor confidence and create a tangible sense of reward. Consistent payouts not only offer stable returns and lower investment risks but also foster a culture of value and long-term investing," the Chinese expert noted.

On April 12, China's State Council released a guideline on strengthening regulation, forestalling risks and promoting the high-quality development of the capital market. It urged rigorous sustained oversight of listed firms, noting that authorities should crack down on illegal shareholding reduction and tighten regulation on cash dividend payments by listed firms, the Xinhua News Agency reported.

"The government is also implementing policies to encourage companies that are capable of paying dividends but reluctant to do so to adopt more proactive dividend practices, fostering a more investor-friendly market," Zhao added.