Reflection direction: return value investing


Reflection direction: return value investing 

2012-11-22 Source: Shenzhen Stock Exchange 

China's securities market has experienced twenty years of development, investors are accustomed to win way to trade spreads, neglect of fundamental analysis, market speculation thicker atmosphere, investors chase sell process losses. 

Market in reflection, investors need to reflect 

Stable returns from the acquisition of wealth preservation and appreciation perspective, long-term investment than short-term operation frequently. Investors should look for from the depths of ideological reasons, from changing their investment philosophy to start, return the value of investments. Genuine care, concern the fundamentals of listed companies, pay attention to long-term returns, so that a rational investment, value investing. 

Since the beginning of the construction of China Securities Regulatory Commission attaches great importance to standardize the system of cash dividends of listed companies, in May this year issued "on the further implementation of the listed company's cash dividend related matters," which requires listed companies to improve the dividend policy, dividend streamline decision-making mechanism, strengthen information disclosure dividends, dividend earnestly fulfill commitments. This measure will help market gradually form a stable dividend mechanism to maintain the stable development of the market, improve the long-term investment value of the stock market, but also very beneficial to investors to earn a reasonable return on investment from the listed companies, reinforce the cornerstone of market development. 

Listed companies profit distribution and return to shareholders the way 

To find out how to reward investors of listed companies, listed companies must understand the distribution of profits and returns to shareholders of the way. In general, listed companies can use the following three forms of return on investment to shareholders: (1) current year profit company to distribute cash; (2) the distribution of new shares to company profits that year; (3) reserve for corporate earnings. To this end, we need to focus on understanding the analysis of listed companies return several key indicators and their meanings. 

1. Cash dividend: cash distribution, distribution of cash to shareholders, namely the cash dividend. 

2. Bonus: The bonus shares allocated, the stock dividend, is free delivery to shareholders, also known as "bonus." It is worth noting that the bonus shares will be diluted earnings per share, dividend per share and so on, will be dilutive shares. When bonus issue, the share capital of listed companies has changed, but the total net assets of the listed company does not occur any change in the annual operating strength would not be any form of change in the future. 

3. Surplus public reserve: refers to enterprise statutory surplus reserve fund, or any bonus shares to shareholders. Surplus reserve accumulation funds drawn from enterprises in accordance with the provisions of after-tax profits, bonus shares to its shareholders and its essence is to use surplus reserve surplus reserve allocated to shareholders and then to share dividends, bonuses and dividends to increase the registered capital, dividends, shareholders. 

In addition, the dividend rate is a reflection of return to shareholders of listed companies is an important indicator. Dividend yield is the ratio between dividends and stock price, also known as dividend yield. Dividend yield is the selection of income-producing stocks of important reference standard, if the listed company for many years in a row annual dividend rate of more than one-year bank deposit rate, then the stock can be considered a basic income stocks, the higher the dividend yield to attract investors. Determine the level of the dividend yield is not only the level of dividends and dividend rate, but also depending on the share price to be. 

Part of the listed company dividends and dividend distributions as investors get return on investment, in general, when the listed companies distributed dividends and bonuses, the more the present value of returns investors earned during the year higher, if a listed company capable of commitment and sustained, long-term cash higher cash dividend, indicating that the company has strong profitability. From another perspective, also shows that the listed company pay more attention to investor returns, with some long-term investment value. 

Most should pay attention to the care and dividend returns 

Medium to long term, the stock price fluctuates around value, the value of listed companies to decide on stock prices the most important factor, the dividend is an important benchmark indicators of value investing. Current market, some small investors prefer various subjects, stocks, regardless of what the concept, investors are expected to enhance the company's value, but in fact a lot of themes, concepts do not have investment value. When faced with the market all kinds of stocks, ordinary investors must learn how Quweicunzhen restore the facts themselves, in a rational, calm attitude towards stocks, carefully study the company announcement, an objective analysis of its connotation of investment value, to seize the return to investors the nature, in order to identify the information hidden behind the concept of the real investment value, but do not be fooled by the colorful aura of the concept itself, in order to get a good return on investment. 

In 2010 the US market, for example, studies have shown that major players in the market are mainly steady, low risk appetite of investors, 96 percent of investors believe that investment in securities is a long-term savings, 87 percent of investors buy and take hold strategy, 83% of investors do not care about short-term price fluctuations, only 19% of investors with short-term profits as the goal. Thus, like the US, with a century of history of the development of mature securities market, the vast majority of investors, investment philosophy is more valued capital gains dividends after five years or long-term holders of stock per year. If you can regularly dividends of listed companies, indicating good performance of listed companies, worthy of their long-term holding. 

For investors, the implementation of value investing, not only need to understand the overall dividend market conditions, should grasp the distribution of market dividends, to find sustainable and stable dividend companies. The past three years, the Shenzhen A-share listed companies overall in absolute dividend, the dividend on the number of companies have continued to grow, the listed company's cash dividend ratio (cash dividends accounted for net profit ratio) is close to 30%; the last three years in Shenzhen A share dividend for three consecutive years listed companies has reached 353, accounting for time to market for over 3 years 42.28% of the total number of listed companies, more number of outstanding company for dividend, reflecting the return to investors of listed companies increased awareness; CSI 300 Index 2011 dividend rate of 2.34%, exceeding the S & P 500 dividend yield level of 2.12 percent, some listed companies dividend rate significantly exceeds the one-year bank deposit interest rates, and even some company's dividend rate reached 5.91% and 5.35%, reflecting the higher investment value. [Four of the "positive returns to investors" series of promotional articles] (This article is provided by the Shanghai Securities Co., Ltd. Xue Zhongliang) 


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