The Zhitong Finance App learned that on the evening of April 26, Xinchao Energy (600777.SH), a company listed on the A-share main board, handed over a beautiful report card. In 2023, the company continued to maintain a steady level of profit, and its oil and gas production equivalent reached a record high. At the same time, Xinchao Energy stated in the relevant bill that in order to enhance the ability to continuously return returns to investors and create more value for shareholders, the company plans to take a number of measures to resolve dividend barriers.

The 2023 annual report shows that in 2023, Xinchao Energy achieved operating income of 8.849 billion yuan, realized net profit to mother of 2,596 billion yuan, deducted non-net profit of 2,696 billion yuan, and basic earnings per share of 0.38 yuan.

By the end of 2023, Xinchao Energy's total assets reached 33.581 billion yuan, and its net assets reached 20.09 billion yuan, breaking the 20 billion yuan mark. Net assets per share reached 2.96 yuan, an increase of 19.35% over 2.48 yuan at the end of 2022. The cumulative undistributed profit of listed companies at the end of the financial consolidated statement period reached 5.295 billion yuan, and the balance of undistributed profit of the listed company (parent company) itself was -2379 billion yuan.

Regarding the dividend issue, Xinchao Energy stated in the announcement that since the parent company can distribute profits to shareholders in a negative way, according to the current provisions of the “Listed Company Supervisory Guidelines No. 3 - Cash Dividends for Listed Companies”, “Shanghai Stock Exchange Listed Companies Self-Regulatory Guidelines No. 1 - Standardized Operation” and the “Articles of Association”, it does not meet the relevant technical conditions for distributing cash dividends and bonus shares.

However, Xinchao Energy stated in the announcement that in order to actively implement the spirit of the State Council's “Certain Opinions on Further Promoting the Healthy Development of the Capital Market” document, enhance the ability to continuously return returns to investors, and create more value for shareholders, the company plans to take a number of measures to resolve dividend barriers.

According to reports, at the end of 2023, the “Company Law” was substantially revised (“New Company Law” for short). According to section 214 (2) of the “New Company Law”, capital reserve funds can be used to cover losses. The New Companies Act will be officially implemented on July 1, 2024.

Therefore, the board of directors of Xinchao Energy plans to request amendments to the “Articles of Association” in accordance with the “New Company Law” at the latest shareholders' meeting to amend the relevant content of section 153 of the “Articles of Association” to be consistent with the “New Company Law”, that is, “allowing capital reserves to cover losses.” At the same time, a bill relating to the use of the parent company's capital reserve to cover the parent company's accumulated losses was reviewed to create conditions for dividends. According to the data, as of the end of 2023, the capital reserve balance of listed companies (parent companies) was 6.657 billion yuan.

Furthermore, the company strives to reach an appropriate solution with creditor Guangzhou Rural Commercial Bank Co., Ltd. as soon as possible on the debt-debt relationship related to the (2022) Guangdong Minzhong Civil Judgment No. 1734 and the (2023) Enforcement Procedure No. 2856 (2023) to completely clear the barriers to operating dividends.

Earlier, Liu Bin, chairman and general manager of Xinchao Energy, said that due to historical reasons, the company's burden is quite heavy, causing the listed company (parent company) itself to have a negative value of undistributed profits. Objectively, the company has been unable to pay dividends to shareholders in recent years. Fortunately, through our continuous efforts, the problems left over from history have now been basically resolved. In the future, the current board of directors will focus on shareholder returns and strive to achieve dividends as soon as possible. At the same time, it will maintain the continuity of the company's development strategy, fully explore the operating benefits of existing assets, and return investors with good business performance.