Shineway Doubles Dividend Payout and Guarantees Compound Increase in Future Annual Dividend Based on Net Profit Growth
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China Shineway Pharmaceutical Group Limited (stock code: 2877.HK) announced that it has adopted a new dividend policy that would bring impressive cash dividend return to its shareholders and becoming a "cash-cow of sustainable growth". The new dividend policy is summarized as followed:
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Shineway expects to declare a dividend of HK$0.39 per share in the second half of calendar year 2021. Together with the 2020 final dividend of HK$0.21 per share distributed on 17 June 2021, shareholders will receive a total dividends of HK$0.60 per share in the calendar year of 2021. This amount is nearly a double of the 2020 dividend.
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Starting from the calendar year of 2022, dividends would be compound increased by a guaranteed 15%. If the annual growth in net profit (without regard to one-time non-recurring profit and loss items) of the preceding year exceeded 15%, then the increase in dividends for that particular year will be based on the growth in net profit of the preceding year.
Assuming a 25% net profit growth in each year, and a 1.2 exchange rate of RMB to HKD, dividends for the next three years can be depicted as follows:
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- Dividends to be paid in 2021: RMB 0.60 / HK$ 0.72
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- Dividends to be paid in 2022: RMB 0.75 / HK$ 0.90
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- Dividends to be paid in 2023: RMB 0.94 / HK$ 1.13
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- Dividends to be paid in 2024: RMB 1.18 / HK$ 1.42
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From the calendar year of 2022 onwards, the dividends as declared by the Company shall be paid out to the shareholders of the Company four times a year at quarterly intervals in the form of interim dividends.
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Shineway is confident that this new dividend policy which guarantees compound increase in future annual dividend based on net profit growth would attract long-term investors to invest in Shineway's shares.
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For more details, please contact DLK Advisory by emailing to ir@dlkadvisory.com.
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