May 11 (NBD) -- Fuyao Glass Industry Group Co., Ltd. ("Fuyao Glass"), a Fuzhou, China-based company principally engaging in the manufacturing and distribution of float glass and automobile glass, recently impressed the Chinese stock market thanks to its tremendous cash dividend. 

According to Fuyao Glass' corporate social responsibility report for 2017, the company has cumulatively paid to investors around 10.8 billion yuan (1.7 billion U.S. dollars) in cash dividends and about 1.4 billion yuan (221.3 million U.S. dollars) in stock dividends for 24 years since it got listed in June 1993, while the amount of money the company has raised on the Chinese mainland through two share allotments and two issuances of additional shares as of 2016 added up to approximately 7.4 billion yuan (1.2 billion U.S. dollars). 

It can be seen the cash dividends paid by the company in the period were far higher than the amount of funds it raised. 

Liu Shiyu, chairman of the China Securities Regulatory Commission, once pointed out that viewing from the international experience, continuous and stable cash dividend payment is a demonstration of listed companies' financial soundness and stability. 

In the 2017 annual report, Fuyao Glass again revealed its generous plan of paying a cash dividend of 7.5 yuan (pre-tax) for every 10 shares. This marks the fourth year in a row that the company paid high cash dividends to investors. 

Photo by NBD

The automotive glass manufacturer's Chairman Cao Dewang told NBD in an exclusive interview that such program shows the respect the company has given and the importance the company has attached to shareholders, and it's also a significant way to reward shareholders. For example, shareholders in Hong Kong who ask about the dividends every year don't really care about how much they can get, but the respect the company should show them. 

Fuyao Glass' high cash dividend payout ratio is bolstered by its striking business performance. 

Last year, the automotive glass supplier registered about 3.1 billion yuan (495.7 million U.S. dollars) in net income attributable to shareholders of listed company, representing a year-over-year increase of 0.14 percent. 

It also stressed in the annual report that it is financially sound as its profitability index for the recent three years all showed an upward trend.  

Regarding how to balance the corporate development and high cash dividend payout ratio, Cao regarded business growth as top priority, saying that his company started paying cash dividends after it had settled the capital issue for reinvestment in early stages. 

In his view, the public shouldn't judge a company simply by its dividend payout, and the key measurement is whether the company can maintain its growth momentum. If the company didn't pay dividends, but chose to reinvest, it would be vital to see whether it can reap profits and how much it can get from the invested projects.   

Email: lansuying@nbd.com.cn