A well-known company, Fangda Carbon (600516), has recently announced its plans to allocate up to 4 billion yuan for financial management purposes. The company and its holding subsidiaries intend to use their own funds to purchase financial products with high security and good liquidity within the next 12 months, pending approval by the general meeting of shareholders.
Fangda Carbon emphasized that this investment in financial products will not affect the normal development of the company’s main business operations. By engaging in moderate low-risk financial management, the company aims to improve the efficiency of using its own funds and achieve investment returns.
This decision comes as no surprise, as Fangda Carbon has previously disclosed plans to utilize idle funds for financial investments. In the past three years, the company has allocated a total of 6 billion yuan towards purchasing financial products. Additionally, Fangda Carbon’s investment performance has been positive, with the company reporting investment income of 152 million yuan in 2023.
Despite having substantial monetary funds amounting to 6.19 billion yuan as of the end of the reporting period, Fangda Carbon has not proposed a cash dividend plan for its shareholders in the past three years. Instead, the company utilized existing buyback rules in 2023 to exempt cash dividends, leading to a repurchase of shares totaling 280 million yuan.
It is essential to note that Fangda Carbon’s 2023 cash dividend, resulting from the share repurchase, accounted for 67.27% of the company’s consolidated net profit for that year. The company has issued cash dividends seven times since its listing, totaling 5.987 billion yuan.
With regards to dividend payments in the broader market, data from the China Securities Regulatory Commission reveals that A-share listed companies have collectively paid dividends amounting to 8.2 trillion yuan over the past five years. However, there are still companies that have not distributed any dividends, prompting regulatory measures to address this issue.
In line with efforts to promote high-quality development in the capital market, the State Council issued “Several Opinions on Strengthening Supervision and Preventing Risks” in April. The new guidelines aim to enhance the supervision of cash dividends among listed companies, particularly focusing on those with a history of non-payment or low dividend ratios.
As Fangda Carbon continues to prioritize financial management and investment strategies, shareholders and market observers will be closely monitoring the company’s further developments in the coming months.