Dividend payments by China’s biggest companies hit record US$174 billion in 2022, S&P report says

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by Enoch Yiu at scmp.com

Dividend payments by the biggest Chinese companies last year hit a fresh record of 1.2 trillion yuan (US$174.43 billion), according to an S&P Global Market Intelligence study released on Wednesday.

Analysts expect the high payouts to continue this year as a result of government policies.

The total payout by companies in the CSI 300, which tracks the biggest 300 stocks in Shenzhen and Shanghai, was up 14 per cent last year, the report said.

China has been the largest market for dividend distribution in the Asia-Pacific region since 2015 and is expected to remain on top this year thanks to government policies encouraging companies to pay dividends, according to senior research analyst Ruiying Zhao, who wrote the report.

“Banks, food and beverage and energy sectors will significantly contribute to the anticipated upsurge in aggregate dividends for the CSI 300 Index,” Zhao said.

“Conversely, due to a lacklustre demand and supply in the preceding year, the real estate and financial sectors are forecast to curtail dividend disbursements.”

Chinese companies have in recent years been sharing a greater proportion of their profits with shareholders following encouragement from Beijing, as the country strives to get more of its stocks included in global indices such as the MSCI, which are tracked by investors.

The hefty dividend payouts appear at odds with the performance of the CSI 300, which declined by 21.5 per cent last year as the country’s economy was battered by the pandemic. China only started to ease its Covid-19 control measures in November, before a full reopening earlier this year.


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