The scale of dividends hit a new high, the dividend rhythm is constantly being optimized, and large dividends of listed companies are frequently reported... In 2024, with the implementation of the new "Nine National Regulations" (Several Opinions on Strengthening Supervision, Preventing Risks and Promoting the High-Quality Development of the Capital Market) and the new dividend regulations, there have been positive changes in cash dividends for A-share listed companies.

A new dividend ecosystem is gradually forming

2024 is the "dividend year" for A-shares. Whether it is the number of dividend companies, dividend frequency or dividend scale, it has improved significantly compared with previous years.

The total cash dividend amount of 3,755 Shanghai and Shenzhen listed companies was about 2.4 trillion yuan, and the dividend scale hit a new high; the dividend amount of 2 listed companies exceeded 100 billion yuan, and the dividend amount of more than 30 companies exceeded 10 billion yuan; the cash dividend ratio continued to increase, and the dividend amount of 2023 financial year accounted for 42.5% of the net profit of that year, an increase of 1.62 percentage points year-on-year...

The rising numbers reflect that the current A-share market dividend ecosystem is gradually forming.

Specifically, the dividend amount of companies in mature stages is higher. Taking the Shenzhen Stock Exchange as an example, since the release of the new "Nine National Regulations", Shenzhen Main Board companies have implemented a total of 405.9 billion yuan in cash dividends, a year-on-year increase of 30%. Main board companies account for about 54% of the overall Shenzhen Stock Exchange, while the total dividends account for 80%.

Exterior location of Shenzhen Stock Exchange. Xinhua News Agency issued

From the medium- and long-term dividend plans issued by listed companies in Shanghai, there are 360, 353 and 387 companies that will release shareholder return plans for the next three years from 2022 to 2024, and listed companies will further form a normal cash dividend mechanism.

Tian Lihui, dean of the Institute of Financial Development of Nankai University, said that dividends can help the company optimize its capital structure, improve the efficiency of capital use, and promote the stable and healthy development of the market. At the same time, dividends from listed companies can convey to the market the signal that the company's financial situation is good, which will help enhance investor confidence.

The new "Nine Regulations" policy effects are highlighted

Cash dividends for listed companies are one of the basic systems of the capital market and are also an important manifestation of protecting investors' rights and interests and strengthening shareholder returns. Since 2024, the policy level has continued to improve the dividend incentive and constraint mechanism for listed companies.

The new "Nine National Articles" issued in April 2024 clearly state that it will strengthen the supervision of cash dividends for listed companies. For companies that have not distributed dividends for many years or have a low dividend ratio, major shareholders will be restricted from reducing their holdings and risk warnings will be implemented. Increase incentives for high-quality dividend companies and take multiple measures to promote the increase of dividend yields. Enhance dividend stability, sustainability and predictability, and promote dividends, pre-dividends and dividends before the Spring Festival.

Since then, the policy support for dividends of listed companies has continued to escalate.

In November 2024, the China Securities Regulatory Commission issued the "Guidelines for Listed Companies Supervision No. 10 - Market Value Management", encouraging the board of directors to formulate and disclose medium- and long-term dividend plans based on the company's development stage and operating conditions, increase dividend frequency, optimize dividend rhythm, reasonably increase dividend rate, and enhance investors' sense of gain; in December, China Securities Depository and Clearing Co., Ltd. issued an announcement that starting from January 1, 2025, preferential measures will be implemented to reduce the dividend payment fee of A-shares in Shanghai and Shenzhen markets by half.

Using the support of policies, the enthusiasm of listed companies to pay dividends has increased significantly. Industry insiders said that a series of policies are conducive to promoting listed companies to repay shareholders with real money on the basis of stable and sustainable operations, which truly enhances investors' sense of gain, and also helps to enhance the company's market image and investment attractiveness.

Listed companies have gradually increased their dividend frequency

The listed companies actively responded to the new "Nine National Regulations" proposed "dividends multiple times a year, pre-dividends, and dividends before the Spring Festival".

From the interim dividend situation, as of January 21, 2025, a total of 975 listed companies have issued interim dividend announcements for 2024 (including first-quarter reports, semi-annual reports, and third-quarter reports), with the cash dividend amount reaching 691.92 billion yuan, and the number and amount are 4.2 times and 2.7 times that of the same period last year respectively. The number and amount of mid-term dividends of Shanghai and Shenzhen listed companies have doubled.

At the same time, the atmosphere of dividend distribution has gradually emerged during the year, and the atmosphere of dividend distribution before the Spring Festival has become increasingly strong. Within the two months before the Spring Festival (December 2024 to January 2025), it is estimated that a total of 324 companies will implement dividends, with a dividend amount of 350.99 billion yuan, and the number and amount of the company and the amount are 9.8 times and 7.8 times that of the same period last year.

It is worth mentioning that companies in different industries, growth stages, and operating conditions have different dividend strengths, but they are actively responding to policy orientations and gradually increasing the frequency of dividends.

Shanghai Stock Exchange Exterior Location. (Photo provided by the Shanghai Stock Exchange)

Taking the Science and Technology Innovation Board listed companies as an example, public data shows that the number of Science and Technology Innovation Board companies that implement medium-term dividends has increased from 15 in 2020 to 111 in 2024. A total of 105 companies on the Science and Technology Innovation Board have clearly stated in the 2024 "Improving Quality, Efficiency and Remaining Return" plan to study dividends multiple times a year, mid-year dividends or pre-dividends before the Spring Festival.

"The concept of investor returns for companies on the Science and Technology Innovation Board is gradually deepening." Yang Delong, chief economist of Qianhai Kaiyuan Fund, said that companies on the Science and Technology Innovation Board are in the stage of increasing R&D investment, accelerating technology commercialization and accelerating capacity expansion. We need to respect the company's formulation of medium- and long-term dividend plans based on the actual situation of the industry, development stage, business model, etc., and balance the relationship between supporting the company's development and improving the level of investor returns. (Reporter Liu Yujia)