Core Viewpoint - Stock dividends are a crucial method for listed companies to distribute profits to shareholders based on operational results, serving as a primary avenue for shareholder returns [1] Summary by Category Cash Dividends - Cash dividends are a common form of stock dividends where companies distribute a portion of current net profits or retained earnings to shareholders in cash, based on their shareholding [1] - According to the revised regulations in 2025, companies must clearly define their cash dividend policies in their articles of association, including conditions, minimum ratios, and intervals [1] - The cash dividend process requires a proposal from the board of directors and approval from the shareholders' meeting, adhering to corporate governance requirements [1] - Shareholders must pay personal income tax on cash dividends according to the 2025 Personal Income Tax Law and its supporting regulations [1] - Companies are required to disclose dividend amounts, payment dates, and tax information transparently to help shareholders understand their returns [1] Stock Dividends - Stock dividends involve companies converting retained earnings into shares, distributing them to shareholders without compensation, which increases the number of shares but does not change total equity [2] - The 2025 regulations stipulate that companies must have positive retained earnings and sufficient reserves to implement stock dividends, along with detailed disclosures on the impact on key financial metrics [2] - Shareholders are also required to pay personal income tax on stock dividends, with specific tax calculations following the latest tax department policies [2] Capital Increase - Capital increase is often viewed as a form of dividend but differs fundamentally from stock dividends, as it involves transferring from capital reserves to share capital without profit distribution [2] - According to the 2025 regulations, capital increases do not affect total equity, only changing the structure of equity, and typically do not require shareholders to pay personal income tax [2] Physical Dividends - Physical dividends are a unique form where companies distribute products, services, or other physical assets to shareholders [3] - The 2025 regulations require fair valuation of physical dividends by qualified appraisal agencies, along with detailed disclosures about the type, quantity, and valuation basis of the assets [3] - Due to complexity and valuation challenges, physical dividends are less common in market practice but must still comply with disclosure and fairness regulations [3] Overall Implications - Different forms of dividends reflect various financial strategies and return philosophies of listed companies, and shareholders should consider compliance, financial impact, and tax policies when evaluating dividend proposals [3]