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In terms of EBITDA earn, the company has about HKD$200-210 Billion generated per year. Taxes amount to about HKD$25 bil. So its true cash generation ability is in the region of HKD$175-$185 billion.
SBB thus far across 4 quarters = HKD$71 billion, Dividends= HKD$22.6 billion.
That is a lot of free cash left behind. Tencent is a conglomerate that has been generating large amount of cash.
It is a conglomerate that is in the midst of spinning off assets in order to become smaller and less in the crosshair of regulators. Hence acquistions have slowed. The accumulation of HKD$15 billion more in cash each quarter; feel could be better deployed to be distributed in the form of dividends and SBB. This means the possibility of either increasing its SBB rate or dividends by 50%. Entirely possible based on the Tencent Conglomerate cash generation ability.
Same too for Alibaba which is using only about 50% of its free cash as distribution back to shareholders in the form of SBB + Dividends. Unless there is a need to keep cash aside to make more donations to the provincial governments
<As an Alibaba Investor, I have been frequently writing to IR to distribute back more of the free cash generated to shareholders in form of SBB/Dividends, however, it does seem the Chinese are very prudent or frugal in cash management which results in a growing cash hoard>
Weighing between the prospect of Dividends and SBB. For China companies, I feel dividends are a better than SBB. This is due to its political climate. Existing investors get the money and decide for themselves if they wish to buy more shares for income or deploy it for other uses. Secondly, with the knowledge of an annual dividend, investors are assured they will not lose 100% of their capital should the communist govenrment turns evil and strangle these giants. SBB means 100% is still lost
Hence dividends for China companies may be a stronger impetus to improve investor perceptions
SBB thus far across 4 quarters = HKD$71 billion, Dividends= HKD$22.6 billion.
That is a lot of free cash left behind. Tencent is a conglomerate that has been generating large amount of cash.
It is a conglomerate that is in the midst of spinning off assets in order to become smaller and less in the crosshair of regulators. Hence acquistions have slowed. The accumulation of HKD$15 billion more in cash each quarter; feel could be better deployed to be distributed in the form of dividends and SBB. This means the possibility of either increasing its SBB rate or dividends by 50%. Entirely possible based on the Tencent Conglomerate cash generation ability.
Same too for Alibaba which is using only about 50% of its free cash as distribution back to shareholders in the form of SBB + Dividends. Unless there is a need to keep cash aside to make more donations to the provincial governments
<As an Alibaba Investor, I have been frequently writing to IR to distribute back more of the free cash generated to shareholders in form of SBB/Dividends, however, it does seem the Chinese are very prudent or frugal in cash management which results in a growing cash hoard>
Weighing between the prospect of Dividends and SBB. For China companies, I feel dividends are a better than SBB. This is due to its political climate. Existing investors get the money and decide for themselves if they wish to buy more shares for income or deploy it for other uses. Secondly, with the knowledge of an annual dividend, investors are assured they will not lose 100% of their capital should the communist govenrment turns evil and strangle these giants. SBB means 100% is still lost
Hence dividends for China companies may be a stronger impetus to improve investor perceptions