LU - China's So Cheap We're Seeing 50% Yield Special Dividends!
2024-07-06 07:20:51 ET
Summary
- Two Chinese companies, Lufax Holdings and DouYu, recently announced special dividends that yielded 50% for shareholders who held immediately after the payouts were announced.
- The Lufax special dividend has already been paid.
- The DouYu special hasn't been paid and is not ex-dividend yet. Although the stock has responded to the dividend announcement, the forward yield is still over 50%.
- Lufax and DouYu are both net-nets.
- In this article, I explore the financial conditions that led to such massive dividend yields from Chinese net-nets, and attempt to gauge whether they can recur.
For several years now, I’ve been chronicling the cheapness of Chinese stocks on Seeking Alpha and elsewhere. It started with coverage of Alibaba ( BABA ), possibly the cheapest big tech stock in the world, and then moved on to general coverage of Chinese markets. Ultimately, it turned out that I got into Alibaba a little too early, but the other Chinese stocks I’ve covered have performed quite well. PDD Holdings ( PDD ) and Postal Savings Bank of China ( OTCPK:PSTVY ) have been particularly strong performers, with the former delivering high capital gains and the latter having paid high dividends since I initiated coverage on it....
China's So Cheap, We're Seeing 50% Yield Special Dividends!