QJY – dividend and issue of new shares

The following dividends were announced by QJY during its years since listed:
2004: HKD2.9 cents (final – listed in June 2004, no interim), 18.7% payout ratio
2005: HKD1.5 cents (interim), HKD1.7 cents (final), 19.7% payout ratio
2006: HKD1.8 cents (interim), 19.5% payout ratio

On several occasions, the CEO indicated expressly that the group’s dividend payout would be targeted at 20% each year and according to past dividend announcements, the shareholders got their dividend payout duly. It is fair to assume that this 20% payout policy will be maintained in the near future. Total cash paid out as dividend after being listed is roughly HKD25.6 million.

Issue of new shares could be a negative factor to its EPS these years. At IPO, 100 million shares were issued to the public at HKD1.28 each. In 2005, 70 million shares were issued at HKD1.83 each and in 2006, 47 million shares were issued at HKD2.28 each. Total capital inflow into the company after IPO from these 2 additional new capital exercises is roughly HKD235 million (70 x 1.83 + 47 x 2.28). It is a comparatively LARGE figure when you look at its IPO proceeds of HKD128 million in 2004.

After the issuance of new shares, the total number of outstanding shares is 507.6 million as of July 31, 2006. This explains the lower growth rate in EPS versus bottom line figures during these years – annual net profit grew 71.6% from FY2004 to H1/2006 while EPS only jumped 18.7% at the same time.