Mega Gold’s company, Mega Property & Casualty Insurance, announced that it will not issue dividends, causing the market to worry about Mega Financial Holdings’ ability to distribute dividends. This dragged down Mega Gold’s share price by 2% today (2), and Financial Holdings even took control of shareholders. The phone call was received softly.

(Photo by reporter Li Lianghui)

[Reporter Li Lianghui/Taipei Report] Zhaofeng Financial (2886) yesterday (1) announced on behalf of its subsidiary Zhaofeng Property & Casualty that "no dividends will be paid", which made the market think that it will drag down the dividend distribution ability of Mega Financial Holdings, dragging down today ( 2) The stock price of Mega Gold fell by 2% on a daily basis, and Financial Holdings even received calls from shareholders.

However, since Megafinance incorporated property insurance as a financial holding subsidiary in 2002, Megafinance has only issued dividends 9 times in the past 21 years, and paid a total of 1.56 billion yuan to financial holdings. The initial capital increase of 2 billion yuan is not enough.

The profits of major financial holdings have shrunk significantly last year. The majority of shareholders who have always used financial stocks as the target of stock holdings are also worried that this year’s shrinking dividends will affect dividend income. Many investors have even decided to withdraw from financial stocks. Any disturbance will affect investment. human sensitive nerves.

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Zhaofeng Property & Casualty Insurance, a 100%-owned subsidiary of Zhaofeng Financial, lost a lot of money last year due to an epidemic prevention policy. So far, Jinkong Financial Holdings has increased capital for the property insurance twice, with a total amount of 8 billion yuan.

Last year, Mega Gold’s EPS was only 1.32 yuan, which is far lower than 1.89 yuan in 2021. However, in 2021, Mega Gold’s allotment of shares will only leave 1.4 yuan in cash dividends, and it will be paired with 0.25 yuan in stock dividends. It is bound to be lower than last year.

However, property insurance did not distribute dividends last year, which can be said to be "normal" in the 21 years since property insurance joined the financial holding company.

The predecessor of Mega Property & Casualty was China Property & Casualty Insurance. It officially joined Mega Financial Holdings in 2002 and changed its name to Mega Property & Casualty Insurance in 2006. Because it is a 100%-owned subsidiary of Financial Holdings, all dividends paid are also handed over to Financial Holdings. However, in the past 21 years, only 9 dividends have been paid, and the accumulated dividends paid totaled 1.56 billion yuan.

According to historical data, the year in which Mega Property & Casualty Insurance pays the most dividends is 2021. It made a profit of 505 million yuan that year, and finally distributed 107 million yuan in dividends to Financial Holdings. However, if the profit of that year is only 200 to 300 million yuan Yuan, because reserves for claims and stock price losses need to be deducted, and there is almost no room for dividends.

Mega Financial Holdings pointed out that the profit of Mega Property Insurance accounted for a very small proportion of the profit of the financial holdings. Taking 2021 as an example, the annual after-tax profit of the financial holdings in that year was 25.746 billion yuan and EPS1.89 yuan. Only 505 million yuan, allotment gold holdings made a profit of 100 million yuan; in 2019, property insurance made a profit of 180 million yuan, but the after-tax profit of Mega Gold was as high as 28.949 billion yuan and EPS2.13 yuan, "accounting for only 1% to 2%".

However, it is an indisputable fact that last year's profit of Mega Gold was dragged down by property insurance. How will Mega Gold's dividend in 2022 be distributed?

Zhaofengjin emphasized that dividends will definitely be paid. Although it will be affected, "how much dividends are paid for how much money is earned." It does not rule out that compared with last year, it will be paid in the form of cash dividends and stock dividends. It is expected to be decided by the board of directors in April.

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