What’s new: Chinese liquor giant Kweichow Moutai Co. Ltd. (600519.SH) will treat shareholders to a 27.5 billion yuan ($3.8 billion) special cash dividend, the first time since going public that the company has paid a bonus separate from its regular annual dividend, according to a Monday exchange filing.
Following the announcement, Kweichow Moutai’s Shanghai-listed shares jumped 5.9% on Tuesday, ending the day at 1,599 yuan apiece.
The state-owned firm’s controlling shareholder Kweichow Moutai Group and a subsidiary will use part of the dividend to buy up to 3.1 billion yuan of the company’s shares, according to a separate filing.
The special dividend, which will be 21.91 yuan a share, and the controlling shareholder’s investment are intended to “boost market confidence” and support Kweichow Moutai’s “long-term healthy and sustainable growth,” the filings said.
The context: Guizhou province-based Kweichow Moutai is the most valuable Chinese onshore stock with a market capitalization of 1.9 trillion yuan, 31% greater than the runner-up Industrial and Commercial Bank of China Ltd. (601398.SH).
With the special dividend, the liquor producer’s dividend payment this year will reach 54.8 billion yuan, higher than its 52.5 billion yuan of net profit last year.
It is the first time that the company’s controlling shareholder has increased its position since 2014. From July 2012 to January 2014, Moutai’s share price had dropped by about 53%. To boost investor sentiment, its parent bought 1.9 million shares in the company from September 2013 through March 2014. The stock price subsequently saw a years-long rally, peaking at 2,601 yuan in early 2021.
Related: Moutai Group Relinquishes Control of Unit, Removing Hurdle to IPO
Contact reporter Guo Yingzhe (yingzheguo@caixin.com) and editor Jonathan Breen (jonathanbreen@caixin.com)
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