Merry Chiristmas! Here are 3 Companies that will likely increase their dividends in 2020/21

Merry Christmas, readers. 

How time flies. The end of the holiday is coming, the hectic pace of work will pick up soon and I will miss thinking, researching and blogging soon.

Here are 3 Counters I believed will increase their dividends is 2020 or/ and 2021

All 3 counters have more or less a payout ratio policy, and pay more when time are good/ bad. Also, all three companies should have better earnings in 2021, due to either better addressable market or simply riding the tide. 

1) UOB kayhian pay out 50% of NP, plus minus, and 1H EPS is 9 cents. Due to the crazy trading during this crisis year, comission interest went up by 90%. How they will do in 2H is anybody guess, but with retailers setting up accounts, low interest rate, and a market in generally swinging from excitment of vaccines, and Brexit and many elections to come in 2021, I believe Volatility will be high and trading will likely improve rather than deteriorate, as no bull or bear can be dominaint

2) CSPC Parma (HK: 1093)

This is an company that kind of blows my mind. They have a payout ration of around 30% and has been increasing their dividends in the last 5 years. 

If you look at margin and ROE, ROIC, it is amazing? right? I couldnt believe my eyes. Payout ration is 30%. Topline and bottom line are also increasing. 

https://secure.fundsupermart.com/fsm/stocks/factsheet/HKEX.1093/CSPC-PHARMA

You can look at other metrics at the above link yourself. It also has a strong balance sheet. I spent quite a bit of time reading up the AR and etc, wanted to know why is such a strong growing company has a shares price that is near 25 years low. 

Someone in the community pointed out that China has various regulartion regarding medicine, and basically, the few that will affect CSPC are 1) Centralised competitive tenders 2) Risk of having medicine removed from rebursement list (No longer subsidized), and one such drug has sales fallen by 60% because of this. 3) No mark up of medicine by hospitals (Hospitals has no incentive to push the sales of certain medicine)

However, the numbers show that it is still growing, especially is Class 1 medicine (Exclusive rights), also they have a record number of medicine to be luanched and in the pipleline as compared to the last 4-5 years. I feel that the market is undervaluing it. 

https://www.dbs.com.sg/treasures/aics/templatedata/article/equity/data/en/DBSV/012014/1093_HK.xml

https://www.dbs.com.sg/treasures/aics/templatedata/article/equity/data/en/DBSV/012014/1093_HK.xml

3) YZJ

YZJ aim to pay out  at least 30% of earnings, although they woud pump it out in a rough year. 2020, EPS is unlikely to exceed 2019, the growth so come in 2021. There are a few trends going for it. Order book improvement is one direct factor. Over the years, YZJ has proven to be able to build a repetoire of different vessels, it has even managed to deliver a rig. Containers freight is improving, low sulphur emisson requirement will drive scrapping of older vessels. 

Conclusion:

While it is likely that dividends will be increase, it is of no use if you suffer capital loss. YZJ has an HTM business, and has taken an significant impairment in the latest quarter. CSPC has very strong balance sheet, but the dividend yield is low, around 2.5 % (They already started intern dividends).

Kayhian dividend yield is still attractive, but going beyond 2021, it is any guess. Also, it has went from $1.08 to $1.4. I would think the MOS is dwindling. 

One need patience, for CSPC to grow over a few years, and time is always a risk. 

As for recovery of dividends, the banks have potenial, once MAS lift the ceiling for dividends, and the relief scheme expires without spike in bad loans and credit cost. I however, put this as a hope rather than a high probabality. 

Enjoy Christmas. Leave a comment if you have ideas of dividend growers.