Analysis of Dividend Payout Ratio and Sustainability of Buchang Pharma's Dividend Policy

Based on the collected data, I will provide a detailed analysis of Buchang Pharma’s dividend payout ratio and the sustainability of its dividend policy.

According to public data, Buchang Pharma (603858.SS)'s dividend distribution over the past six years is as follows [0][1]:

Dividend Year	Plan (Dividend per 10 Shares, Including Tax)	Implementation Status
2025	RMB 3.90 (Interim Dividend)	Implemented on September 26, 2025
2024	RMB 1.26	Implemented on August 20, 2024
2023	RMB 9.60	Implemented on August 10, 2023
2022	RMB 3.60	Implemented on August 16, 2022
2021	RMB 5.26	Implemented on August 2, 2021
2020	RMB 16.14	Implemented on July 20, 2020

• Net Profit Attributable to Shareholders of Listed Company
  : RMB 628 million
• Proposed Cash Dividend
  : RMB 411 million (Including Tax)
• Dividend Payout Ratio
  :
  65.52%
  [0]

Based on the latest financial data [0][1]:

• 2024
  : The company’s net profit attributable to shareholders of the listed company in the consolidated financial statements was
  -RMB 554 million
  (loss)
• 2023
  : Net profit attributable to shareholders of the listed company was approximately RMB 1.834 billion
• 2022
  : Net profit attributable to shareholders of the listed company was approximately RMB 1.836 billion
• Cumulative Cash Dividends Over the Past Three Years (Including Tax)
  :
  RMB 1.197 billion
  [1]
• Historical Dividend Payout Ratio
  : Approximately
  43.69%
  (Estimated based on recent data)

According to the company’s articles of association [0]:

1. Minimum Dividend Ratio
   : The profit distributed in cash shall be
   no less than 30% of the distributable profit realized in the current year

2. Differentiated Dividend Policy
   :
   • If the company is in the mature stage with no major capital expenditure plans: The cash dividend ratio shall be at least
     80%
   • If the company is in the mature stage with major capital expenditure plans: The cash dividend ratio shall be at least
     40%
   • If the company is in the growth stage with major capital expenditure plans: The cash dividend ratio shall be at least
     20%

3. Conditions for Cash Dividends
   :
   • The distributable profit realized in the current year is positive
   • Sufficient cash flow
   • The auditor issues a standard unqualified opinion
   • The cumulative distributable profit is positive

4. Upper Limit of Profit Distribution
   : Profit distribution shall not exceed the scope of cumulative distributable profit, and shall not harm the company’s sustainable operating capacity

The company has maintained a consistent dividend tradition, with cumulative dividends exceeding RMB 2 billion over the past six years, demonstrating its emphasis on shareholder returns [1].

The dividend payout ratio in the first half of 2025 reached 65.52%, which is higher than the 30% minimum requirement specified in the company’s articles of association, reflecting a proactive dividend attitude [0].

The company enhances shareholder returns through share repurchases, and the amount of cash share repurchases counted as cash dividends in 2024 reached [1].

• A loss of
  RMB 554 million
  was recorded in 2024, mainly affected by factors such as goodwill impairment [1]
• Earnings per share in Q3 2025 was $0.23, indicating relatively weak profitability [0]

• The current price-to-earnings ratio is as high as
  10,465.88x
  , indicating that the market is relatively cautious about the company’s future earnings expectations [0]
• ROE (Return on Equity) is only
  0.02%
  , reflecting low profit efficiency [0]

The company has a large amount of book goodwill (approximately RMB 499 million). If the operating performance of the acquired targets fails to meet expectations, it may affect future profits and dividend-paying capacity [1].

The pharmaceutical industry is highly competitive, and profitability is greatly affected by policies. Changes in fiscal subsidy policies may have an impact on the company’s performance [1].

Buchang Pharma’s dividend policy

:

Assessment Dimension	Conclusion
Dividend Tradition	★★★★★ Good record of consistent dividends
Dividend Ratio	★★★★☆ Exceeds minimum requirement
Financial Health	★★☆☆☆ Loss in 2024, low ROE
Cash Flow	★★★☆☆ Operating cash flow status requires attention
Industry Outlook	★★★☆☆ Faces policy and competitive pressure

1. Focus on Short-Term Dividend Returns
   : For investors seeking stable cash flow, Buchang Pharma’s 65.52% interim dividend payout ratio is attractive

2. Beware of Performance Fluctuation Risks
   : The 2024 loss indicates that the company’s profitability is not yet stable; attention should be paid to the 2025 full-year performance

3. Exercise Caution for Long-Term Investment
   : Considering the company’s risks of goodwill impairment and industry policy uncertainties, it is recommended to pay attention to changes in the company’s fundamentals

4. Track Policy Changes
   : Adjustments to pharmaceutical industry policies may have a significant impact on the company’s performance, requiring continuous attention

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[0] Jinling AI Financial Database - Buchang Pharma Company Profile and Financial Data (January 2026)
[1] Sina Finance - Buchang Pharma 2024 Annual Report and Historical Dividend Announcements (https://money.finance.sina.com.cn/corp/view/vCB_AllBulletinDetail.php?stockid=603858&id=11002602)
[2] Shandong Buchang Pharmaceutical Co., Ltd. 2025 Interim Report (http://money.finance.sina.com.cn/corp/view/vCB_AllBulletinDetail.php?stockid=603858&id=11380947)