Research On The Types And Economic Consequences Of CITIC Special Steel’s Dividend Policy

As one of the important decisions of corporate governance,dividend policy can often play the role of profit redistribution.It can balance the interests of all parties,give back to investors and promote the sound development of the company.It plays an important role in maintaining the health and stability of China’s securities market.Similarly,the payment of cash dividends will also convey the information of the company’s operating conditions to the market and deepen the market’s understanding of the company.As a leader in the special steel industry,CITIC special steel has issued 13 cash dividends since its listing in1997,with a cumulative cash dividend of 4.414 billion yuan.However,since its listing,the actual financing amount of the company is only 762 million yuan,in sharp contrast to the total dividend.Its dividend amount is 5.79 times of its total financing amount,which shows that CITIC special steel is willing to pay dividends.Therefore,this thesis makes an in-depth study on the dividend policy and market response of CITIC special steel,which can enrich and improve the dividend policy research in China to a certain extent,and put forward some opinions and suggestions to improve the dividend distribution policy,which has certain theoretical and practical significance.This thesis selects CITIC special steel as a specific research object to study its dividend distribution policy over the years.Through the analysis of the company’s development process,the company’s financial situation and the company’s life cycle,combined with its dividend policy over the years,and then makes a horizontal and vertical comparison with its peers Baosteel and Valin Iron and steel,Summarize the characteristics and types of dividend policy of CITIC special steel.This thesis also uses the event research method to study the market response of CITIC special steel’s dividend policy,summarizes the advantages and disadvantages of CITIC special steel’s dividend policy,and finally puts forward some countermeasures and suggestions to improve CITIC special steel’s dividend distribution policy.This thesis finds that since its listing,CITIC special steel has experienced several processes of start-up,growth and maturity.In the process of continuous development and growth of the enterprise,the financial situation of the enterprise has basically maintained a trend of getting better year by year,which has laid a foundation for its stable cash dividend for many years.Combined with its dividend policies over the years,The dividend policy implemented by CITIC special steel actually adapts to the life cycle of its enterprise.The choice of dividend policy type of CITIC special steel is accompanied by the continuous development and growth of the enterprise.The company chooses to implement different dividend policies according to the actual development needs,and flexibly distribute profits to adapt to the flexibility of the company’s operation.However,the study on the economic consequences of the dividend policy of CITIC special steel found that the implementation of the dividend policy may not have a positive market response,so as to improve the stock price.If the dividend policy fluctuates little,the market reaction basically does not change.However,when CITIC special steel increases the cash distribution per share by a large amount,the market is not optimistic about the dividend policy of CITIC special steel,and the stock price falls.If the company does not pay dividends after continuous dividends,and then pays dividends again,to a certain extent,the market will have a positive reaction when it pays dividends again.At the same time,the research also found that the dividend policy implemented by CITIC special steel since its listing is relatively single,basically focusing on cash dividends,and the implementation of high cash dividend policy after the company becomes the market leader,which may damage the interests of minority shareholders.The implementation of the dividend distribution policy of CITIC special steel has its unique advantages,but there are also some disadvantages.For this,this thesis puts forward the following countermeasures and suggestions to improve the dividend policy.Firstly,the company should maintain a reasonable and relatively stable dividend policy;Secondly,the way of dividend distribution should be reasonable and appropriate;thirdly,enterprises should optimize the ownership structure;finally,from the perspective of policy supervision,relevant laws and regulations should be improved.