Bonus shares distribution means that the listed company keeps the profit of the current year in the company and distributes stocks as dividends, thereby converting profits into equity. After the bonus shares were distributed, the total structure of the company’s assets, liabilities, and shareholders’ equity remained unchanged, but the total share capital increased and the net assets per share decreased.
The conversion of shares refers to the company's conversion of capital reserves into share capital. The conversion of share capital does not change the shareholders' equity, but it increases the scale of share capital, so the objective result is similar to bonus shares.
The essential difference between the conversion of share capital and bonus shares is that the bonus shares sent from the company's annual profit after tax, only when the company has a surplus, the bonus shares can be sent to shareholders; and the capital increase is derived from the capital reserve, not subject to the profits available for distribution in the current year and the restrictions of the time, as long as the capital reserve is recorded, recorded to increase the registered capital can be, therefore, the capital increase is not strictly speaking to shareholders of the dividend return.