The first annual dividend case after listing is pending, CHABAIDAO fell nearly 9% intraday

CHABAIDAO (2555.HK) has made other arrangements for its first annual dividend plan after listing.

On July 29th, CHABAIDAO, which just landed on the Hong Kong stock market in the first half of this year, announced that considering recent changes in the external environment, the board of directors has decided to cancel the distribution of the 2023 annual dividend. They are currently considering adjustments to the dividend distribution plan, and the total amount of dividends under the adjusted plan will not be less than the original total amount.

CHABAIDAO stated that it "currently has sufficient funds and will reserve cash resources for daily business operations."

The original dividend plan of CHABAIDAO was to distribute HKD 0.3069 per share, with a total dividend of approximately HKD 454 million, and a dividend payout ratio of 36.33%.

The day after the announcement was made, CHABAIDAO plummeted, dropping nearly 9% before noon, hitting a new low since its listing. By the midday close on July 30th, its stock price for the year had halved.

Huawei News · TradeWind01 inquired with relevant personnel from CHABAIDAO about the changes to the dividend distribution plan, and they stated that they are currently in a quiet period before the financial report is released and cannot provide more information.

Huawei News · TradeWind01 also learned from a securities consumer analyst in North China that the adjustment of CHABAIDAO's dividend this time is mainly due to external factors such as overseas fund approvals.

According to relevant regulations of the State Administration of Taxation and the State Administration of Foreign Exchange, if a domestic company uses profits or funds in China to pay dividends to overseas investors, when a domestic institution or individual pays foreign exchange funds equivalent to or exceeding USD 50,000 to overseas parties in a single transaction, except in specific circumstances, they need to file tax records with the competent national tax authority.

After completing the tax filing procedures, the filer presents the filing form stamped by the competent national tax authority and, in accordance with foreign exchange management regulations, goes to a designated foreign exchange bank to handle the payment review procedures.

CHABAIDAO conducted its Hong Kong IPO on April 23rd this year, issuing a total of 148 million shares, accounting for 10.01% of the total share capital.

Among them, 14.78 million shares were publicly sold in Hong Kong; and 133 million shares were sold overseas in a private placement (including to professional institutional investors in Hong Kong).

After listing, CHABAIDAO's actual controlling shareholders, Mr. Wang Xiaokun and Ms. Liu Weihong, control over 80% of the shares; while senior executives of CHABAIDAO and external institutional investors such as Positive Valley Capital and CICC collectively hold less than 10% of the shares.

Since the beginning of this year, regulators have been increasing guidance on dividend distribution by listed companies.

At the end of last December, the China Securities Regulatory Commission issued regulatory documents such as "Guidelines for the Supervision of Listed Companies No. 3 - Cash Dividends by Listed Companies (Revised in 2023)", mentioning the need to "further clarify the encouragement of cash dividends, promote an increase in dividend levels, strengthen disclosure requirements for companies that do not distribute dividends, and focus on supervising companies with a high level of financial investments but low dividend levels to urge an increase in dividend levels and focus on core businesses."

CSRC Chairman Wu Qing has publicly stated that they will encourage eligible companies to distribute dividends more than once a year, encouraging multiple dividends in a year.

Although CHABAIDAO operates in the Hong Kong stock market, which is not the main regulatory category of the CSRC, investors still have demands and expectations for dividend distributions by listed companies Whether in the A-share or Hong Kong stock market, high-dividend stocks are highly favored by the market.

From the sharp fluctuations in the stock price of CHABAIDAO, the market is expecting a new dividend distribution plan for CHABAIDAO after the adjustment not lower than the original plan.

As of the time of publication, the decline in the stock price of CHABAIDAO in the Hong Kong stock market has narrowed from nearly 9% before the midday break to about 5%