The China dividend story

CHA-AM Advisors

David Scott explores Chinese investors’ growing appetite for dividends. Unlike Japan, where it took a generation for companies to deliver meaningful payouts, China’s path looks very different. The companies are younger and are often still run by the founder who owns a controlling interest. Domestic institutional shareholders are active, rights-conscious, and increasingly reliant on dividends amid falling interest rates and an ageing population. Dividend growth is also seen as a strategic signal - proof that tariffs are not going to derail the business model. Finally, both private and state-linked firms are raising dividends at a surprising pace. David's China dividend plays include Midea Group, BYD, Tencent and CATL.

- 18 April, 2025

China: Dividends and duds

CHA-AM Advisors

Now is not the time to be buying developers and other property plays, according to David Scott. 1) Chinese property developers have never generated any meaningful FCF. 2) David heard the same story in Japan / Thailand following their property busts. The boom never returned and never will. 3) The more government involvement in an industry, the worse the returns are for the minority shareholders. 4) In a country of enormous numbers the amounts being talked about are too small. In this week’s edition of David's ‘A Strategist’s Diary’, he also outlines the key characteristics of a GCGB (Great China Growth Business) focusing on 3 stocks: Midea, Kweichow Moutai and Sungrow Power Supply.

- 31 May, 2024

The China Rotation: Allocations hit 4-year lows

Copley Fund Research

Allocations in China & HK equities among active EM investors have plummeted 10%+ in the space of 18-months (India, Taiwan and Mexico have been the biggest beneficiaries) - on a sector level, China Industrials and Consumer Staples are the overweights, with managers rotating into Financials and away from Consumer Discretionary. On a stock level, Alibaba remains a core holding; out-of-benchmark AIA Group and Midea Group are popular, and for Value managers, China Mobile and CNOOC are key overweights. Active managers have stayed away from both NIO and Xiaomi, so pressure to invest on the grounds of benchmark tolerance should be disregarded.

- 27 May, 2022