Research On The Motivations And Effects Of High Cash Dividends Of Pharmaceutical Listed Companies

Dividend policy has always been the focus of experts and scholars at home and abroad.Dividend policy is not only related to the rights and interests of major shareholders and external minority shareholders,but also will have a decisive impact on the operation and development of enterprises in the future.Therefore,in the financial management related research of listed companies,dividend policy related topics have been the frequent discussion of scholars.In the earlier stage of financial market development in our country,many listed companies preferred to retain the profits more internally.Before entering the 21 st century,it was the mainstream dividend policy for listed companies to pay no cash and the extremely low amount of cash.After 2000,with the continuous development of the securities market,the "iron rooster" behavior of listed companies gradually attracted the attention of regulators.In order to encourage listed companies to pay more cash dividends,China Securities Regulatory Commission(CSRC)began to issue a series of relevant policies,tying the cash dividend with the refinancing qualification.The dividend policy of listed companies in China actually has the policy background of "Semi-mandatory dividend".Under the requirement of the policy,many listed companies have swept the previous no dividend or less dividend pie,began to frequently carry out cash dividend.Too much of a good thing is not enough.Since the CSRC only set the minimum requirement for cash dividends,but did not set the upper limit,the phenomenon of high cash and even super ability cash has become a common phenomenon among listed companies.Therefore,the stock exchange issued a research report to remind the majority of investors to guard against some companies with strong profitability and concentrated ownership structure damaging the value of the company and the interests of small and medium investors through high payouts.Some studies have also found that not all profitable companies are suitable for high payouts.At present,High cash dividends should fully consider the company’s operating conditions,the pressure of debt repayment and the development stage of the company.Otherwise,both the future growth of the company and the rights and interests of small investors in the external market will be damaged to varying degrees.This paper chooses Te Yi Pharmaceutical as the case study object.Although Te Yi Pharmaceutical is a pharmaceutical manufacturing company with small assets,it has certain typical behavior of high distribution.Since its listing in 2014,Te Yi Pharmaceutical has paid cash dividends every year.Since 2017,it has paid out high dividends for five consecutive years,and the annual dividend payment rate has been above 80%,which can be described as "liquidated" high cash dividend.Among them,the dividend payment rate in 2020 and 2021 has reached 302% and 114%.This paper carries out research based on case study method.Firstly,through data collection and collation,it obtains the specific implementation of dividend policy of a particular pharmaceutical company over the years,and analyzes and summarizes the significant characteristics of its dividend policy.Next,select the financial basic indicators of profitability and cash flow indicators to analyze the implementation of the material basis and payment conditions.Taking the theory of dividends as the premise of the research,the motivation and effect of the current action of the high school of Te Yi Pharmaceutical were studied.Then,on the basis of the aforementioned research,the high dividend current performance of Te Yi Pharmaceutical was evaluated,and some positive effects brought by the high dividend current performance for enterprise management were affirmed.However,the existing problems of its high dividend current policy were pointed out and relevant suggestions on dividend policy formulation of listed companies were put forward.Finally,based on the above research content,this paper puts forward the research conclusions and prospects.Different from previous researches on high payout,most of which focused on industry leading enterprises,the case company selected in this paper was Te Yi Pharmaceutical,a small listed company belonging to the traditional Chinese medicine industry,which enriched the existing researches on high payout dividend policy from the perspective of the diversity of company scale and industry choices.In the analysis of the reasons for the high cash dividend of Te Yi Pharmaceutical,this paper makes a more in-depth analysis from the perspective of the industry peer effect and the proportion of major shareholders’ equity pledge,which is very rare in previous studies and reflects certain innovation.In this paper,the research on the problems existing in the high school current behavior of Te Yi pharmaceutical industry is helpful to arouse the attention of regulators and the public to the high school current behavior and the super ability current behavior,and help investors better distinguish the different nature of the listed companies’ current behavior.In addition,the paper provides suggestions and references on optimizing dividend policies for other listed companies that also choose high dividend policies in the stock market,providing reference for the healthy development of the financial market.