interface journalist feng yuchen

Recently, the "Securities Times", "China Securities Journal" and other media reported that the China Securities Regulatory Commission intends to amend the cash dividend rules of listed companies, focusing on "iron rooster" companies and strengthening restrictions.

according to statistics from flush iFind, 1203 companies in the-share market have not paid dividends in the past three years (subject to the dividend data disclosed in the annual report from 2020 to 2022). excluding 257 companies listed in 2023, 946 companies still have "paid nothing" to shareholders in the past three years ". Among the 946 companies, there is no shortage of Salt Lake shares (000792.SZ) and other companies that have achieved tens of billions of profits but have not paid dividends for three consecutive years. From the perspective of the industry, the pharmaceutical and biological industry, the electronics industry, the machinery and equipment industry, and the computer industry have the most "iron rooster.

It is worth noting that, compared with the previous dividend regulations, this revision also mentions the focus on the main board listed companies that do not reach the proportion of dividends, as well as the strengthening of disclosure requirements for listed companies with high financial investment. For listed companies that exceed their ability to pay dividends, they will be "cross-examined" based on the impact of their asset-liability ratio and operating cash flow on operating production ".

on the main board, excluding those listed since 2023, 659 main board companies have been listed as "iron roosters" in the past three years, including 230 companies such as salt lake shares, Zhengzhou bank (002936.SZ), Pegasus international (rights protection)(002210.SZ) that have made accumulated profits in the past three years. Among them, Zhengzhou Bank, Potassium International (000893.SZ) and other 10 companies have accumulated profits of more than 1 billion yuan in the past three years. They not only did not pay dividends, but also carried out additional financing.

659 main board companies have not paid dividends in the past three years

According to related reports, the person in charge of the relevant department of the China Securities Regulatory Commission introduced that the China Securities Regulatory Commission intends to amend the cash dividend rules of listed companies. The revision mainly focuses on four aspects, namely: it is proposed to further strengthen institutional constraints on companies that do not pay dividends or pay less dividends to urge dividends, promote further optimization of the way and rhythm of dividends, encourage companies with good dividends, and strengthen the constraints on companies that exceed their ability to pay dividends.

for companies that do not pay dividends or pay less dividends, the CSRC said it would strengthen institutional constraints on the "iron rooster" to supervise dividends, strengthen the supervision of information disclosure, and require disclosure and explanation of the reasons for the dividends of listed companies on the main board that do not reach a certain proportion.

according to the statistics of interface news reporters, 702 of the 3182 Shanghai and Shenzhen main board companies have not paid cash dividends in the past three years, excluding 43 listed companies since 2023, and 659 main board listed companies have not paid cash dividends in the past three years.

according to flush iFind data, 230 of the 659 main board "iron roosters" have accumulated profits in the past three years, with 35 having a net profit of more than 1 billion yuan in the past three years. Represented by Salt Lake Co., Ltd., Zhengzhou Bank, Pegasus International, Yongtai Energy (600157.SH) and Antong Holding (Rights Protection)(600179.SH), the net profits of 22.082 billion yuan, 8.816 billion yuan, 8.375 billion yuan, 7.458 billion yuan and 5.402 billion yuan have been realized respectively.

Among them, there is no shortage of companies that have made a profit without paying dividends and also throwing out additional issues. Bank of Zhengzhou has not only failed to pay dividends in the past three years, but also raised an additional 4.632 billion yuan in December 2020. In addition, Potassium International, Vanadium and Titanium (000629.SZ), China Iron (000927.SZ), Huachuang Yunxin (600155.SH), Jidian (000875.SZ), Northern Copper (000737.SZ), Sichuan Energy Power (000155.SZ), Jinkai Xinneng (600821.SH), Kaisheng Xinneng (600876.SH) and other 9 companies have all increased their profits in the past three years by 1 billion since 2020.

At the same time, there are 429 non-dividend main board companies that have not made any money in the past three years, and many airlines are on the list. HNA Holdings (Rights Protection)(600221.SH) has accumulated losses of up to 56.888 billion yuan in three years, while Air China (601111.SH), ST Tesco (002024.SZ), China Eastern Airlines (600115.SH), China Southern Airlines (600029.SH), Huaxia Happiness (600340.SH), Bohai Leasing (000415.SZ,) * ST Guangtian (002482.SZ), Zhongtai Motor 6006.000 Yuan.

The above-mentioned non-dividend-paying main board listed companies will not only face stricter information disclosure, but also be restricted by new regulations on shareholding reduction and refinancing. On August 27, the CSRC also "stuck" the proportion of dividends in the new regulations on the reduction of holdings, agreeing that "if cash dividends have not been paid in the last three years and the cumulative amount of cash dividends is less than 30% of the average annual net profit in the last three years, the controlling shareholder and the actual controller shall not reduce the company's shares through the secondary market".

looking at the whole, according to the data of flush ifind, there are about 1825 companies in the-share market that have not reached the "30%" reduction pass line for their accumulated cash dividends in the past three years, including the 1203 listed companies that have not been divided.

Regulators are putting pressure on the "iron rooster". What are the nearly 1,000 listed companies that do not pay dividends? And what have made money but do not pay dividends?

According to the classification of the Shenwan industry, the above-mentioned 946 "iron roosters" are most clustered in the pharmaceutical and biological industry (87), followed by the electronics industry (86) and machinery and equipment (86), and the computer industry (58).

Image source: Interface News Securities Group

87 "dime" pharmaceutical and biological companies have had a hard time in the past three years, with 66 having a negative cumulative net profit in the past three years. The most earned is Tongce Medical (rights protection)(600763.SH),2020 to 2022 to achieve a net profit of 1.744 billion yuan, the same period Guanfu shares (rights protection)(002102.SZ), Guizhou Bailing (002424.SZ) profit of 0.671 billion yuan, 0.409 billion yuan.

The electronics industry, on the other hand, appears to be "stingy" and rich. Of the 86 non-dividend companies, 41 have lost money on their cumulative net profits over the past three years, but at the same time some have made wild profits. SMIC (688981.SH) "leads the way" and has earned 27.198 billion yuan in the past three years. During the same period, SMIC (688012.SH), Jingchen Stock (688099.SH), Guanjie Technology (000727.SZ) and Jiangbolong (301308.SZ) made profits of 2.673 billion yuan, 1.653 billion yuan, 1.365 billion yuan, 1.362 billion yuan and 1.201 billion yuan respectively.

Let's look at the listed companies of machinery and equipment and computers that do not pay dividends. 52 of the 87 machinery and equipment companies lost money. China Iron and Steel (000927.SZ), Ningbo Dongli (Rights Protection)(002164.SZ), Dongfang Seiko (002611.SZ), China National Machinery Reloading (601399.SH) and Connie Electromechanical (Rights Protection)(603111.SH) all had accumulated net profits exceeding 1 billion yuan in the past three years.

The computer industry is a bit of an embarrassment ". 44 of the 58 listed computer companies that do not pay dividends have not made profits in the past three years. Only Jingwei Hengrun (688326.SH), Runhe Software (300339.SZ), Dongfang Guoxin (Rights Protection)(300166.SZ) 7 and other companies have accumulated profits of 0.1 billion yuan.

On the whole, among the 946 "iron roosters" that have not paid cash dividends in the past three years, the most profitable are non-SMIC and Salt Lake. The cumulative net profit in the past three years is more than 10 billion yuan. Zhengzhou Bank, Pegasus International, Yongtai Energy, and Antong Holdings also exceeded 5 billion yuan.

as to why SMIC CFO Wu Junfeng once explained at the 2023 annual general meeting that due to the characteristics of the foundry industry, capital expenditure is relatively large, so the company's operating cash is deducted from the expenditure on fixed assets, intangible assets and other assets, and the free cash flow is still negative.

related reports said that in the constraints on companies that do not pay dividends or pay less dividends, the CSRC will also strengthen disclosure requirements for companies with more financial investment, urge companies to improve the efficiency of asset use, better focus on the main business and return investors.

Compared to the previous document "Guidelines for the Supervision of Listed Companies No. 3-Cash Dividends of Listed Companies (Revised in 2022)", this revision of the new regulations explicitly mentions the focus on the company's financial investment.

The most direct representative of financial investment is financial products. Since August this year, Jinbo shares (688598.SH), Nandu Property (603506.SH), Xianheng International (605056.SH) and Microlight shares (002801.SZ) have all announced that they are all stepping on thunder trust for financial management. Whether the financial products of listed companies are "safe" has also aroused investors' concern and concern.

Financial products belong to a class of trading financial assets of listed companies, and trading financial assets are an important indicator of the level of financial investment. Excluding securities, banks, and non-bank finance industries with relatively large asset liquidity, as of June 30 this year, among the 946 "iron rooster" companies in the above statistics, 17 companies accounted for transactional financial assets. Net assets reached more than 50%.

The trading financial assets of HNA Holding (600221.SH), Huachuang Yunxin (600155.SH) and ST Tesco (002024.SZ) are more than double their net assets, with ST Jianyuan (600816.SH), Mengke Pharmaceutical (688373.SH) and Di Zhe Pharmaceutical (688192.SH) all exceeding 70%.

Dividends beyond capacity are not acceptable

A management of a listed company told reporters that dividends depend on the company's ability and willingness to pay dividends. In terms of ability, there are hard indicators for reference. Willingness, the need for listed companies to take the initiative.

the interface news reporter noted that Article 5 of the "Guidelines for the Supervision of Listed Companies No. 3-Cash Dividends for Listed Companies (Revised in 2022)" sets hard targets for the proportion of cash dividends for profit distribution by companies at different stages of development. For example, if the company's development stage is mature and there is no major capital expenditure arrangement, the minimum proportion of cash dividends in this profit distribution should reach 80%.

In the proposed revision of the rules by the CSRC, attention has been paid to the financial indicators of listed companies whose willingness to pay dividends is greater than their ability, that is, companies that are beyond their ability to pay dividends.

Specifically, the CSRC said it would strengthen its restrictions on dividend-paying enterprises beyond its capacity. First, efforts to ensure that the company's performance is true, the dividend base is solid, and effectively prevent listed companies from financial fraud and financing dividends. Second, for listed companies with high asset-liability ratio and insufficient operating cash flow, but continuous high proportion of dividends, it is required to disclose in detail the rationality of the dividend plan and its impact on the company's production and operation.

According to flush ifind data, 4077 listed companies have paid cash dividends in the past three years. Among them, the losses of 311 companies should also be divided. The most typical ones are * ST Zhengbang (002157.SZ), Rongsheng Development (002146.SZ), Huaneng International (600011.SH) and Jinke (000656.SZ). The accumulated losses in the past three years were as high as 26.462 billion yuan, 13.765 billion yuan, 13.086 billion yuan and 10.761 billion yuan respectively, and the accumulated dividends in the same period were 2.188 billion yuan, 1.522 billion yuan, 2.826 billion yuan and 2.399 billion yuan.

in terms of debt ratio, there are 97 companies with an average asset-liability ratio of 80% or more in the past three years, representing * ST Zhengbang, with an average asset-liability ratio of 100 in the past three years. It is also worth mentioning that there are 42 listed banks in the-share market, of which 41 have paid cash dividends in the past three years. Because of the nature of the industry, their three-year average asset-liability ratio is as high as 90%.

in terms of operating cash flow, from 2020 to 2022, 463 of the 4077 listed companies with dividends will have negative net operating cash flow. among them, industrial bank (601166.SH), everbright bank (601818.SH) and ping an bank (000001.SZ) have achieved a total of 10 billion cash dividends, with accumulated dividends of 62.842 billion yuan, 33.433 billion yuan and 13.448 billion yuan respectively, the cumulative net operating cash flow of the three companies in the past three years was -768.586 billion yuan, -51.483 billion yuan and -74.322 billion yuan respectively, which is mainly related to their industry attributes.

During the same period, many non-financial companies also made large cash dividends when their cumulative net operating cash flow was negative.

the total cash dividends of GAC group (601238.SH), Benxigang plate (000761.SZ), weifu high tech (000581.SZ), Yuyuan shares (600655.SH), * ST zhengbang, Shanghai petrochemical (600688.SH) and Nanjing high tech (600064.SH) in the past three years were 6.672 billion yuan, 4.446 billion yuan, 3.993 billion yuan, 3.22 billion yuan, 2.188 billion yuan, 2.165 billion yuan and 2.086 billion yuan respectively, cumulative net operating cash flows for the same period were-$13.825 billion,-$0.349 billion,-$7.921 billion,-$1.166 billion,-$3.119 billion, and $3.545 billion, respectively.