WORLD PRECISION: This S-chip, yes S-chip, surprises with dividends, big dividends

Some 18 years ago, ie April 2006, a Chinese company, World Precision Machinery, listed on the Singapore Exchange.

Dividends illn That's a long time ago, and it is still listed, even if you may not have heard of it.

It's indeed a rare specimen among S-chips. So many of them have become extinct over the years because of accounting irregularities, including overstated revenues, phantom receivables, missing cash, and outright manipulation of stock prices.

Though World Precision is standing strong, along with big-name peers like Yangzijiang Shipbuilding and China Aviation Oil, the stock has little liquidity.

World Precision (market cap: S$104 million) manufactures both standard and customized stamping machines for industries including automotive parts, home appliances and electronics.

What stands out is its dividends.

It is a long-running track record of dividend payouts. Check out this article from 10 years ago: @ WORLD PRECISION'S AGM: "Dividends paid exceed IPO proceeds"

The timing of the latest dividend announcement came as a surprise: This was in its 1Q2024 results announcement on the evening before the 1 May public holiday.

And the size of the dividend was breath-taking: RMB 0.37, equivalent to 7 Singapore cents/share. Compare that to its recent traded price of 26 cents.

Dividends track5.24

The latest dividend matches the RMB 0.375 dividend declared at half-time in FY2023.

The 2023 dividend "arises from the Company’s receipt of the distribution of proceeds of the capital reduction exercise carried out by World Precise Machinery (China) Co., Ltd., a wholly owned subsidiary of the Company," said the company then.

In its 1Q2024 announcement, World Precision did not specify a reason for the latest dividend.

Its 1Q2024 was anything but scintillating with a net loss of RMB607,000 (1Q2023: RMB11.6 million net profit). Contributory factors: Lower revenue, higher financial costs and higher impairments.

Executive Chairman and controlling shareholder Wang Weiyao.As for its outlook, "the Group is cautiously optimistic to remain profitable in FY2024. The Group’s order book stood at RMB 446.1 million as at 24 April 2024."

World Precision had RMB386 million in cash and RMB245 million in debt as at end-1Q2024.

Dividend payouts largely go to 2 insiders (and most of the rest of the dividends to 200+ shareholders who own more than 10,000 shares each).

World Precision's executive chairman Wang Weiyao and non-executive and non-independent director Shao Jianjun own 73.85% and 13.53%, respectively, of the company. That's a total of 87.38%.

WORLD PRECISION: This S-chip, yes S-chip, surprises with dividends, big dividends

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