Introduction
The Chinese electric car manufacturer BYD recently announced an exceptionally generous compensation package for its shareholders, which includes bonus shares, capital shares, and a cash dividend. These measures are not only a sign of appreciation for investors but also a strategic step towards strengthening equity and the long-term direction of the company.
Details of the Dividend Package
- Bonus Shares: For every ten BYD shares held, eight bonus shares will be issued. This represents a substantial increase in the number of shares for existing shareholders.
- Capital Shares: In addition to the bonus shares, twelve capital shares will be issued for every ten shares held. These new shares come from the company’s capital reserves and will be distributed free of charge to existing shareholders.
- Cash Dividend: A cash dividend of approximately 39.74 Renminbi (around 5.49 US dollars) per ten shares will be paid. This is a direct financial reward for shareholders.
Impact on the Stock Market
The announcement of this generous package has caused BYD’s stock price in Hong Kong to rise by 3.9% to 390.40 HKD. The total number of outstanding BYD shares will increase from about 3.039 billion to over 9.117 billion, representing a significant expansion of the equity capital.
Importance for Investors
These measures are a clear signal of BYD’s long-term direction and stability. They show that the company is willing to share its profits with shareholders while simultaneously strengthening equity. This could encourage investors to invest long-term in the company.
Decision by the General Assembly
The final decision on the dividend package will be made at the General Assembly in June. Until then, investors will remain focused on the company’s further developments.