Commentator Jia Yunke
In the capital market, high dividends are often seen as a reflection of the value return of corporate shareholders, but companies that blindly pursue high dividends may bury hidden concerns about their development. Recently, Whirlpool (SH600983) has attracted widespread market attention due to its proposed high proportion (744.69% of net profit for the year) cash dividend, which clearly deviates significantly from its current operating situation.
According to Whirlpool's 2023 annual report, the company achieved a net profit of only 81.1327 million yuan during the period, but the total dividend (dividends from the third quarter of last year plus year-end dividends) was as high as 604 million yuan. A rational question arises, will such dividend decisions affect the normal operation of the company, and even have adverse effects on the rights and interests of small and medium-sized shareholders?
The profitability of a company is the fundamental guarantee for its dividends. From Whirlpool's performance in recent years, its operating revenue has continued to decline and has fallen into a predicament of seven consecutive declines; Although net profit began to turn losses into profits in 2022 and increased in 2023, it is not enough to support such a high proportion of cash dividends. Such dividend behavior will undoubtedly squeeze the company's future development space and R&D investment, and may even bring a shortage of working capital to the enterprise, damaging the long-term interests of small and medium-sized shareholders.
Further analysis shows that Whirlpool's dividend funds mainly come from the pre dividend of its subsidiary Guangdong Whirlpool, rather than the net profit of Whirlpool itself. This dividend model is actually a practice of sacrificing the future development potential of subsidiaries and parent companies, and is not advisable for enterprises pursuing sustainable and healthy development. Moreover, for the controlling shareholder of Galanz, whether such dividends have other considerations and whether there is suspicion of internal interest transfer are all questions worth pondering for investors.
In this context, it is thought-provoking whether regulatory authorities should take action to set more scientific and reasonable standards and restrictions for corporate dividends? The amount of enterprise dividends should not exceed an appropriate proportion of its net profit, which is not only a guarantee of the company's financial health, but also a protection of the interests of small and medium-sized shareholders. Many mature capital markets overseas have established clear regulations aimed at preventing business risks caused by excessive dividends.
For Whirlpool itself, it is obvious that it should focus more on improving the operational level of the enterprise, rather than making a big fuss about dividends. The seven consecutive years of revenue decline are enough to trigger a profound reflection by Whirlpool management. In order to establish a foothold in the increasingly competitive market, enterprises must have sustained innovation ability and good market adaptability, rather than relying on temporary profit distribution policies to attract the attention of investors.
In this seemingly calm and turbulent capital market, Whirlpool's dividend policy undoubtedly stirred up waves. Small and medium-sized shareholders should unite and demand that companies provide a reasonable dividend plan. Regulatory authorities should also be vigilant about such "hollowing out" dividend behavior and timely introduce corresponding regulations. Only under rational supervision and the joint supervision of investors can enterprises maintain a healthy development trajectory and truly achieve long-term stable returns.