On August 22, 2024, Shougang Cent (103.HK) announced a dividend plan for the next 5 years, planning to distribute no less than HK$40,000,000 to shareholders as dividends for each fiscal year from 2024 to 2028. The company stated that the consistent and stable dividend plan demonstrates the company's improving financial performance and profit-making ability, showing confidence in the company's future profit-making ability, as well as the determination to reward shareholder support. The company is willing to actively share its surplus with shareholders, reflecting the company's value of serving shareholders wholeheartedly, in order to gain continuous support and confidence from shareholders. The management indicated that the company will periodically formulate higher dividend distribution plans based on financial performance growth.

Implementing a stable dividend policy and steadfastly continuing to reward shareholders.

Shougang Cent's five-year dividend plan in this instance continues the company's generous dividend policy in the past. In the last three years, the annual dividend rate has remained at over 30%, with a dividend rate of over 31% in 2023, almost doubling the rate of 17% in 2019. In addition, the company's average dividend yield over the past 5 years is 5.87%, higher than the average dividend yield level of Hong Kong-listed companies through the Stock Connect program. According to LiveReport's statistics, as of May 10, 2024, the average dividend yield (TTM) of H-share listed companies in the Stock Connect was 5.18%. This five-year dividend plan is a solemn commitment to stably and steadfastly distribute dividends, demonstrating the company's confidence in future development prospects, and showing determination to actively reward profits to shareholders, sharing performance and asset valuation improvements with shareholders.

Furthermore, by committing to stably distribute dividends and reward shareholders, Shougang Cent is also demonstrating itself as one of the "China Concept Stocks," actively responding to the previous call by the China Securities Regulatory Commission. It will continuously enhance profit-making ability and dividend distribution ratio to improve shareholder equity return on investment, in order to achieve the goal of realizing valuation increases.

The massive market space and stable performance growth support the commitment to dividends.

Shougang cent's stable dividend policy is backed by the company's stable business performance. The group's main business is the production of steel cord for radial tires. Excluding the disturbances during the epidemic, the company has shown rapid growth since 2023, with the full-year revenue in 2023 nearly reaching 2.5 billion yuan, a 16.50% increase from around 2.1 billion yuan in 2019 before the epidemic. The full-year 2023 net profit also achieved a high-speed growth of 30.61%, with a significant increase of 54.97% in earnings per share; the company also previously announced that it will achieve a net profit growth of no less than 28.45% in the first half of this year, indicating that the business performance has entered a clear turning point. The full-year 2023 net profit growth rate is significantly higher than the gross margin growth rate, reflecting the company's cost reduction and efficiency improvement measures, and gradually reducing the debt-to-asset ratio. The increase in cash holdings is advantageous for the company to seize the window of industry integration in the steel cord sector, seek overseas production capacity strategic mergers and acquisitions, and achieve the goal of strengthening and expanding.

The current automotive industry is thriving, and the increasing production of new energy vehicles has significantly increased the demand for related tires. The continuous growth in the sales of automobiles and tires drives the market expansion for steel cord used in radial tires, and in the long run, it will bring broader development opportunities to the steel cord industry. Industry data shows that the global revenue of steel cord was approximately 519.08 million USD in 2023, and is projected to grow to 724.61 million USD by 2028. The enormous industry growth potential will provide excellent historical growth opportunities for the company. With its rich industry experience and brand advantages, Shougang cent will firmly seize the rising opportunities in the industry, continue to expand the market, consolidate its leading position in the industry, and aims to become an enterprise in the industry with an annual production capacity of over 300,000 tons of quality steel cord, continuously bringing rich returns to shareholders.