BYD Co (HK:1211), China’s leading electric vehicle maker, saw its shares rise 5% on Wednesday after announcing a revised profit distribution plan that includes issuing bonus and capitalization shares alongside a cash dividend.
In a filing, the company proposed giving shareholders eight bonus shares and 12 capitalization shares for every 10 shares they hold. In addition, it plans to pay a cash dividend of 39.74 yuan per 10 shares.
Capitalization shares are free shares given to existing shareholders using the company’s capital reserves. The move is designed to reward shareholders and boost liquidity in the market. BYD said this plan would increase its total outstanding shares by over 6 billion.
Following the announcement, BYD’s shares in Hong Kong rose 5% to HK$394.60 as of 05:43 GMT, outperforming the broader market.
The proposal still requires approval from shareholders at the company’s annual meeting in June.
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