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RCECAP issues 1:1 bonus shares

RCECAP announced the distribution of 1:1 bonus shares after the close of trading on September 5th, with an execution date of September 25th after the close of trading and execution on the 26th.
The purpose of issuing bonus shares:
1. Increase liquidity: Bonus shares can increase the number of shares in circulation in the market, thereby increasing the liquidity of the stocks. More freely tradable shares mean that investors can buy and sell stocks more easily, especially when the company's stock price is high, which promotes trading activity.
2. Decrease in stock price: After distributing bonus shares, the company's stock price will correspondingly decrease. Although the total value held by shareholders remains the same, the price per share decreases. This makes the stock more attractive to small investors because the price per share becomes lower and easier to purchase.
3. Boosting market confidence: The distribution of bonus shares is sometimes seen as a company's expression of confidence in its future development. The company believes it has the ability to maintain good profitability, and therefore can expand its share capital.

The situations that usually occur after distributing bonus shares include:

1. Stock price adjustment: Due to the doubling of the number of shares, the stock price will generally decrease accordingly. For example, if the current price is 3.26 yuan, after distributing a 1:1 bonus share, the theoretical stock price will halve to about 1.63 yuan, but the total market value of shareholders will not change.
2. Market reaction: Sometimes investors interpret the distribution of bonus shares as positive news, causing the stock price to rise after the announcement of the bonus share distribution. However, after the execution date, there may be short-term selling pressure due to the adjustment of the stock price.

Please note.Stock dividend distribution does not change the company's fundamentals, it only adjusts the distribution of stocks. Investors need to consider the background of the stock dividend distribution, the company's financial condition, and market trends to make decisions.
The distribution of bonus shares may affect the method of dividend payment, depending on the company's dividend policy and the capital structure after the distribution of bonus shares. Here are several possible impacts:

1. 每股股息降低:派发红股后,公司的总股本增加,而公司的利润并没有因此增加。这意味着,如果公司总的分红金额保持不变,那么每股的股息可能会相应减少。例如,如果之前每股分红0.10元,那么派发1:1红股后,股息可能会减少到0.05元每股。
2. 总分红金额不变:在一些情况下,公司可能会调整分红政策,保持每股的股息不变,但这需要公司有足够的盈利能力来支持增加的股本。如果公司能够继续维持或提高利润,股东可能仍然会获得相对相同甚至更多的分红。
3. Therefore, investors need to closely monitor the company's future earnings expectations and dividend policy adjustments to evaluate the actual impact of bonus share distribution on future dividends.

Disclaimer: I am not a financial advisor, the above information should not be considered as financial advice. Investment involves risks, please make decisions cautiously.
Disclaimer: I am not a financial advisor, the above information should not be considered as financial advice. Investment involves risks, please make decisions cautiously.
Disclaimer: Community is offered by Moomoo Technologies Inc. and is for educational purposes only. Read more
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