An Evergrande property project in Guangxi Photo:
An Evergrande property project in Guangxi Photo:

China Evergrande, the second largest Chinese property developer by sales, announced a dividend payment on Thursday that is equivalent to half of its accumulated profits for 2016 and 2017.

The developer owned by Chinese top tycoon Hui Ka-yan withheld a two-year dividend in preparation for a return to an A-share listing despite having not yet set a date for such plan.

The dividend will be huge. China Evergrande reported a net profit of 24.37 billion yuan (US$3.56 billion) in 2017, following a 5.09 billion yuan net profit in 2016, according to a filing to the Hong Kong stock exchange that declared an accumulated net profit of 29.46 billion yuan in 2016 and 2017.

Half of which amounts to 14.7 billion yuan (US$2.15 billion), making it one of the largest payouts by a property developer in history.

Big beneficiaries will be Chinese Estates owner Joseph Lau and his wife Kimbie Chan, whose eight percent of shares in China Evergrande will earn them a payout of 1.17 billion yuan (US$170.69 million).

Read: The young and rich are unpredictable

The announcement led to China Evergrande rebounding to close to prices at the beginning of the year, before developers were hit by fears that Beijing might put a damper on the booming property market. The the high financial gearing of many property companies was another source of pessimism that affected industry stock prices.

Positive results for the Guangdong-based company continue to roll in. Earlier this week, China Evergrande issued a positive profit alert, saying it expected to double its half-year profit, thanks to increased property sales.

As such, China Evergrande will clock in a profit above 52 billion yuan (US$7.58 billion) in the first half of this year, which means it is poised to enjoy a record profit year.

Thanks to strong cash flow, the company’s net gearing ratio is also set to drop, from 184% at the end of last year, to below 130%.

Read: Chinese developers fail to benefit from soaring prices