Most Popular
1. It’s a New Macro, the Gold Market Knows It, But Dead Men Walking Do Not (yet)- Gary_Tanashian
2.Stock Market Presidential Election Cycle Seasonal Trend Analysis - Nadeem_Walayat
3. Bitcoin S&P Pattern - Nadeem_Walayat
4.Nvidia Blow Off Top - Flying High like the Phoenix too Close to the Sun - Nadeem_Walayat
4.U.S. financial market’s “Weimar phase” impact to your fiat and digital assets - Raymond_Matison
5. How to Profit from the Global Warming ClImate Change Mega Death Trend - Part1 - Nadeem_Walayat
7.Bitcoin Gravy Train Trend Forecast 2024 - - Nadeem_Walayat
8.The Bond Trade and Interest Rates - Nadeem_Walayat
9.It’s Easy to Scream Stocks Bubble! - Stephen_McBride
10.Fed’s Next Intertest Rate Move might not align with popular consensus - Richard_Mills
Last 7 days
Friday Stock Market CRASH Following Israel Attack on Iranian Nuclear Facilities - 19th Apr 24
All Measures to Combat Global Warming Are Smoke and Mirrors! - 18th Apr 24
Cisco Then vs. Nvidia Now - 18th Apr 24
Is the Biden Administration Trying To Destroy the Dollar? - 18th Apr 24
S&P Stock Market Trend Forecast to Dec 2024 - 16th Apr 24
No Deposit Bonuses: Boost Your Finances - 16th Apr 24
Global Warming ClImate Change Mega Death Trend - 8th Apr 24
Gold Is Rallying Again, But Silver Could Get REALLY Interesting - 8th Apr 24
Media Elite Belittle Inflation Struggles of Ordinary Americans - 8th Apr 24
Profit from the Roaring AI 2020's Tech Stocks Economic Boom - 8th Apr 24
Stock Market Election Year Five Nights at Freddy's - 7th Apr 24
It’s a New Macro, the Gold Market Knows It, But Dead Men Walking Do Not (yet)- 7th Apr 24
AI Revolution and NVDA: Why Tough Going May Be Ahead - 7th Apr 24
Hidden cost of US homeownership just saw its biggest spike in 5 years - 7th Apr 24
What Happens To Gold Price If The Fed Doesn’t Cut Rates? - 7th Apr 24
The Fed is becoming increasingly divided on interest rates - 7th Apr 24
The Evils of Paper Money Have no End - 7th Apr 24
Stock Market Presidential Election Cycle Seasonal Trend Analysis - 3rd Apr 24
Stock Market Presidential Election Cycle Seasonal Trend - 2nd Apr 24
Dow Stock Market Annual Percent Change Analysis 2024 - 2nd Apr 24
Bitcoin S&P Pattern - 31st Mar 24
S&P Stock Market Correlating Seasonal Swings - 31st Mar 24
Here's a Dirty Little Secret: Federal Reserve Monetary Policy Is Still Loose - 31st Mar 24
Tandem Chairman Paul Pester on Fintech, AI, and the Future of Banking in the UK - 31st Mar 24
Stock Market Volatility (VIX) - 25th Mar 24
Stock Market Investor Sentiment - 25th Mar 24
The Federal Reserve Didn't Do Anything But It Had Plenty to Say - 25th Mar 24

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

China CSRC Demands Higher Dividends from China Listed Companies

Companies / China Stocks Sep 03, 2008 - 02:29 AM GMT

By: Money_and_Markets


Best Financial Markets Analysis ArticleNilus Mattive writes: The China Securities Regulatory Commission — Beijing's equivalent of the U.S. Securities and Exchange Commission — is pressing the country's listed companies to adopt more generous dividend policies.

Previously, China-listed companies that wanted to issue additional stock had to pay out at least 20% of their annual average profit for the past three consecutive years in the form of shareholder dividends (cash or stock).

The CSRC wants to raise the minimum amount to at least 30% of profits to shareholders. If a company refuses to comply, it will be punished by not being able to float new bonds or sell additional shares.

According to the Chinese agency,

"Giving fair returns to shareholders is part of listed firms' responsibilities and is the foundation of stable and healthy development of the securities market."

Listed companies will also have to include information on their cash dividend policies and previous cash dividend data in their annual reports.

If they don't declare cash dividends? Well, they'll have to tell investors why, along with what they plan on doing with their retained earnings!

The CSRC was soliciting comments on the new plan through last Friday. And while I didn't shoot them an e-mail, here's my official response — "Heck, yeah!"

I couldn't agree with them more strongly. In fact, the only bone I'd pick with their policy is that it allows the "dividends" to be paid as stock and not solely in cash.

It's something I've said many times before. Shareholders, as the owners of a company, deserve to get their portion of the profits in regular cash installments. Not someday. Not if or when the stock goes up.

Unfortunately, as the CSRC so candidly stated,

"We've noticed that some listed companies lack continuous and steady long-term dividend systems."

Yeah, I've noticed the same thing. And not just on foreign exchanges. Think of how many U.S.-listed firms fail to deliver dividends at all!

The CSRC policy won't directly affect that, even for Chinese companies trading on our exchanges. But it does send a great message to the markets about the importance of dividends. And the mentality behind this mandate is precisely why ...

Plenty of Chinese Companies Including U.S.-Listed ADRs Are ALREADY Paying Very Nice Dividends

As I have previously said, my favorite way to play foreign markets is by cherry-picking individual dividend-paying companies. And rather than deal with the hassles of buying foreign shares, I advocate buying American Depositary Receipts (ADRs).

These U.S.-listed shares are easy to buy and sell through your regular broker. Plus, I think the companies that list ADRs tend to have better corporate governance and transparency than many of their foreign-listed-only peers.

When it comes to China, income investors have some good choices. That's especially true now since this year's pullback in Asian shares has pushed prices down and yields up.

Here's a quick rundown of eight popular dividend-paying Chinese ADRs ...

Aluminum Corp. Of China (ACH): Produces alumina and primary aluminum; dividend has grown 38.59% over the last five years.

China Teleco (CHA): Provides wireline, telephone, data and Internet services; dividend has increased 58.96% over the last five years.

Huaneng Power (HNP): Builds, owns and operates coal-fired power plants; dividend has risen 15.66% over the last five years.

Aluminum Corp ACH 1.59%
China Teleco CHA 2.07%
Huaneng HNP 5.65%
China Life LFC 1.56%
People's Food PFH 2.98%
Petrochina PTR 2.94%
Sinopec SNP 3.26%
United Food UFH 2.79%

China Life (LFC): Sells life, accident and health insurance; dividend has risen 231.23% in just the last year.

People's Food (PFH): Produces and sells pork and chicken products under the Jinluo brand; while the dividend decreased 17.38% over the last five years, the stock's yield is still about 3%.

PetroChina (PTR): Major integrated oil and gas company; dividend has risen 27.88% in the last five years.

China Petroleum and Chemical (SNP): Company, also known as Sinopec, is a major oil, gas and chemical producer; Dividend has been upped 19.16% in the last five years.

United Food Holding (UFH): Makes and markets meat products under the Jiangquan brand; Like People's Food, the dividend decreased over the last five years, but the current yield remains close to 3%.

Is now the time to load up on these stocks? Only you know what's right for your individual portfolio. As always, you should do your own research and consider your individual risk tolerance before you make any purchases.

But I can tell you that my Dividend Superstars subscribers currently own one of these companies, and I expect the stock to continue kicking out nice dividends and to post serious capital appreciation, too.

I also want to leave you with one last idea: You don't need to limit your search to just China-based companies. Many Asian countries are experiencing tremendous growth, and they also offer some great dividend-paying firms.

In fact, I'm heading over to Asia for two weeks starting this Friday, and I plan on doing more digging while I'm over there. So stay tuned!

Best wishes,


P.S. Interested in learning which of these dividend-paying Chinese ADRs I recommend right now? Subscribe to Dividend Superstars for just $39 a year. Not only will I rush you my latest issue, but I'll send you a series of special reports right away.

This investment news is brought to you by Money and Markets . Money and Markets is a free daily investment newsletter from Martin D. Weiss and Weiss Research analysts offering the latest investing news and financial insights for the stock market, including tips and advice on investing in gold, energy and oil. Dr. Weiss is a leader in the fields of investing, interest rates, financial safety and economic forecasting. To view archives or subscribe, visit .

Money and Markets Archive

© 2005-2022 - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.

Post Comment

Only logged in users are allowed to post comments. Register/ Log in