Regulator Hosts Forum to Boost Investor Returns Through Improved Shareholder Compensation
The Shanghai Stock Exchange (SSE) is intensifying efforts to encourage listed companies to increase dividend distributions, as part of broader market reforms aimed at enhancing investment value. At a June 5 symposium on “High Dividends & Shareholder Returns,” exchange officials emphasized China’s improving capital market fundamentals and called for greater confidence in domestic assets.
Key initiatives include:
- Expanding payout ratios across more companies
- Increasing distribution frequency (multi-annual payouts)
- Optimizing capital tools like buybacks and M&A for value creation
538 Firms Commit to 3-Year Dividend Roadmaps
Corporate response has been significant, with 538 SSE-listed companies disclosing formal dividend plans for 2025-2027 as of June 7. Notable early adopters include:
Sector Leaders
| Industry | Companies | Notable Examples |
| Electronics | 59 | Will Semiconductor, Luxshare |
| Machinery | 48+ | Sany Heavy Industry |
| Power Equipment | 46+ | Sungrow Power |
Policy-Driven Revisions:
- Lishang National Tide: Raised minimum payout from 50% to 60% of adjusted net profit
- Bank of Ningbo: Committed to maintaining 30%+ payout ratio through 2027
State-Owned Enterprises Take the Lead
Over 100 SOEs have announced enhanced dividend policies, accounting for 9% of all central government-backed listings. Standouts include:
Top Performers:
- COSCO Shipping (601919.SH): Consistent 49-50% payout ratio since 2022
- China Shenhua (601088.SH): New 65% minimum payout threshold
- People.cn (603000.SH): 40% floor with quarterly investor briefings
Buyback Momentum
COSCO Shipping executed two accelerated repurchases totaling ¥2.14 billion ($295M) between April-May 2025, with all repurchased shares subsequently cancelled.
Dividend Growth Outliers
Several firms are making radical shifts in shareholder compensation:
- Transformative Policies
- Huaihe Energy (600575.SH): Jumping from sporadic payouts to 75% minimum ratio
- Sichuan Road & Bridge (600039.SH): Raising baseline from 50% to 60%
Market Response
2024 saw 922 companies pay dividends multiple times (4x 2023 levels), with total distributions hitting ¥2.34 trillion ($322B), up 4.77% YoY.
Market Implications
The SSE’s push aligns with Beijing’s “Quality & Returns” initiative under the new State Council Nine Guidelines. As interim earnings approach, dividend sustainability will become a key differentiator for investors navigating China’s evolving equity landscape.
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