Three questions regarding the Hong Kong stock market's dividend Assets.
According to the Zhitong Finance APP, Guotai Junan released a Research Report stating that the dividend in the Hong Kong stock market has an advantage over the A-share dividend: the dividend payout ratio and proportion of high-dividend Assets in the Hong Kong stock market are higher than in A-shares. Over the past 24 years, the discount and dividend advantage of Hong Kong stock dividends compared to A-share dividends have narrowed slightly, but considering the after-tax dividend, Hong Kong stocks still hold an advantage. The investment logic for dividend Assets in both markets is consistent: the dividend industry structure in Hong Kong stocks is more diversified compared to A-shares, yet the defensive nature remains unchanged, reflecting significant excess returns in a turbulent market environment. The allocation value of Hong Kong stock dividends deserves continued attention: Amid short-term market fluctuations, the dividend and valuation advantages of Hong Kong stocks are prominent, while medium to long-term dividend regulation strengthens + a low interest rate environment supports the performance of Hong Kong stock dividends.
The main points of Guotai Junan are as follows:
Since 2024, the discount and dividend rate advantage of Hong Kong stock dividends compared to A-shares have slightly narrowed, but even after considering the after-tax dividend, Hong Kong's dividend yield still has an advantage.
Overall, Hong Kong stocks have advantages compared to A-shares mainly in terms of cash dividend ratio, dividend yield, and proportion of high-dividend Assets. For example, in 2023, the overall cash dividend ratio of Hong Kong stocks was 48.9%, higher than A-shares' 41.8%. Specifically regarding the internal aspects of dividend Assets, the relative trends of the dividend index between A-shares and Hong Kong stocks have a strong positive correlation with the difference in dividend yield and AH premium. Currently, the premium rate of dividend Assets in both A-shares and Hong Kong stocks is at a historical median level. The difference in dividend yield is also at a historical low level, but considering the after-tax dividends, Hong Kong stocks still have a higher dividend yield compared to A-shares.
There are slight differences in the industry structure of dividend Assets between Hong Kong stocks and A-shares; however, the investment logic for dividend Assets in both markets is basically consistent, and the defensive attributes remain unchanged.
From an industry structure perspective, high-dividend stocks in A-shares are concentrated in industries such as Coal, Banks, and textile services, while high-dividend stocks in H-shares are mainly distributed in real estate, textile services, industrial Transportation, Banks, and construction industries, indicating a relatively more diversified industry distribution of dividend Assets in Hong Kong stocks. The investment logic remains fundamentally consistent between Hong Kong and A-shares, with defensive attributes unchanged. Although there are differences in the composition of A/H dividend Assets, their defensive nature has not changed; that is, in weaker market environments, the excess returns of dividend Assets are more pronounced, but the probability of achieving positive absolute returns also decreases. Thus, relative returns are negatively correlated with market conditions, while absolute returns are positively correlated.
In the short term, the dividend and valuation advantages of Hong Kong stocks are prominent, and the market environment is also conducive to their performance.
Currently, the discount between the Hong Kong Listed in Hong Kong dividend and the A-share dividend as well as the difference in dividend yield is around the historical median. Even considering the dividend tax, the dividend yield of the Hong Kong Listed in Hong Kong dividend Sector still has an advantage. Given the market environment, there may still be significant uncertainty regarding the USA's tariff policy in the short term, and the domestic fundamental recovery may be disturbed by tariffs, which could exacerbate market volatility. In this context, the Hong Kong Listed in Hong Kong dividend Assets may still perform steadily.
From a mid-term perspective, policies strengthening dividend regulation, combined with the acceleration of medium to long-term funds entering the market in a low interest rate environment, mean that the Hong Kong Listed in Hong Kong dividend still has value for allocation.
With the gradual implementation of policies like the 'New National Nine Policies', the dividend enthusiasm and sustainability of A-share and even Hong Kong Listed in Hong Kong companies are expected to increase. At the same time, in a low interest rate environment, there is a strong allocation demand for dividend Assets. Currently, the dividend yield of dividend Assets continues to stand out in comparison to the yield of government bonds, and since the Spring Festival, southbound funds have mainly increased their allocation in high-dividend Assets in the Banks, Telecommunication Services and other industries. Moreover, in recent years, insurance premium income has continued to grow, and the insurance capital is increasingly pursuing absolute returns, which is also expected to raise the allocation demand for high-dividend Assets.
Risk Disclaimer: Past performance does not predict future returns, and the progress of dividend system construction may fall short of expectations.
