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Sias asks Ying Li why it hasn't paid a dividend in 12 years
MAINBOARD-listed Ying Li International Real Estate said on Thursday night that giving shareholders dividends has "always" been part of the board's agenda, but that it is conserving cash in light of the Covid-19 crisis and the need to fund new growth plans.
It added that its real estate business activities are capital-intensive and require significant working capital. The group’s borrowings at the end of last year was about 2.8 billion yuan (S$560 million).
It was responding to the Securities Investors Association of Singapore (Sias), which had asked if the board evaluated how it could balance the need to reinvest in the business and the need to generate return for shareholders in the form of dividends.
Sias said: "The company has not paid a dividend to shareholders in the last 12 years. The last dividend paid out was in August 2008, and it amounted to S$0.00079 per share.”
The association also questioned Ying Li on a "new asset-light operating model" which the company said it was exploring in its latest annual report.
Ying Li replied that this model may comprise "fund and asset management services related to the real estate industry that would potentially minimise the need for significant capital investments and provide a new source of recurring income".
It added that such a model would be in line with the Chinese government’s development strategy for economic growth and leverage on parent China Everbright's extensive network and track record in the mainland.
But the group will require "new resources" and relevant approvals from the authorities for this business activity. Discussions on this are at a preliminary stage, it added.
Ying Li's counter closed down 1.21 per cent at S$0.082 on Thursday.