Dividends poised to hit record high

Spurred by regulatory encouragement, China's A-share companies plan to issue historic cash dividend payouts despite last year's general slowdown in net profit growth.

So far, a total of 1,807 listed companies have outlined dividend plans in their recently-issued 2012 annual financial reports which will see them dispense a record 629.78 billion yuan ($102.59 billion) in cash rewards to shareholders, according to statistics from Wind, a leading financial data provider. As of Monday, 564 companies had already put their plans into action, paying out 54.8 billion yuan to investors, while the remaining firms were still awaiting approval on such plans at their upcoming shareholders' meetings.

But while cash dividends from public companies have been climbing steadily over the past several years - from 388 billion yuan over 2009 to 629 billion yuan over 2012 - dividend yields were up by an annual rate of just 4.12 percent, leveling off considerably from the 28.3 percent expansion seen in 2011, Wind data show.

"Despite the deceleration in growth, dividend results are generally satisfying considering the business performances of A-share companies last year," an analyst with China Securities, who preferred to remain nameless, told the Global Times Monday.

Mainland-listed companies posted 1.95 trillion yuan in net profits last year, up a scant 0.8 percent year-on-year, according to reports in China Business News, a steep drop from the 13.22 percent annual growth rate witnessed in 2011. Moreover, excluding listed financial firms, A-share profits last year were down 11.7 percent over 2011.

"Regulatory prompting has played a major factor in pushing public companies to give out cash," the anonymous analyst noted.

The China Securities Regulatory Commission (CSRC) released rules in May 2012 aimed at tightening disclosure requirements concerning companies' dividend reward plans.

The beginning of this year also saw the Shanghai Stock Exchange issue guidelines recommending that companies distribute at least 30 percent of their annual profits among investors. As a result, more than 600 Shanghai-listed companies drafted cash dividend plans for 2012 involving 546.51 billion yuan, or 86.78 percent of the mainland's total dividends for the year.