Chinese online games developer G-bits pays record dividend as crackdown dents outlook for capital spending
- G-bits Network, whose Wen Dao game ranks among the top 30 downloads in local Appstore, pays record dividend
- Move follows recent dividend windfall for Tencent shareholders as freeze in new approvals disincentivises capital spending
The firm announced a 16 yuan (US$2.50) per share payout in an exchange filing on Friday, the most generous amount since the firm was listed on the Shanghai bourse in 2017. That would translate into a 1.15 billion yuan (US$180.6 million) payout based on its existing capital base.
The payout comes as authorities in Beijing have clamped down on the video gaming industry by withholding approvals for new game titles since end-July last year, while also forcing the industry to slash playing time for children.
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China reportedly slows down online game approvals as crackdown on video game addiction continues
The latest payout offers investors a 4.4 per cent yield, based on its closing price of 364.70 yuan on Friday. Last year’s dividend of 12 yuan amounted to a 2.9 per cent yield, based on the stock’s average price of 407.42 yuan in 2021.
Kweichow Moutai, the country’s most valuable company, also paid a record 21.68 yuan for 2021, though it works out to about 1.2 per cent yield based on its share price of 1,784 yuan.
G-bits shares have tumbled 30 per cent since the government froze game approvals last July, matching the slide in market leader Tencent Holdings, according to Bloomberg data.
The Shanghai Composite Index declined 9.1 per cent over the same period. Before the crackdown, G-bits surged 187 per cent in the two years through to end-2020.
