Carry on communicating: Investor newsletters from NagaCorp

Hong Kong-listed NagaCorp runs Cambodia’s largest hotel-casino, NagaWorld. It is one of the most profitable gaming companies and the largest in the Mekong region. When it listed in Hong Kong in 2006 it became the first gaming IPO on the city’s exchange, and the first foreign-owned company with operations in Cambodia to list overseas.

But this is a business vulnerable to the effects of Covid-19 and when lockdown reached Cambodia, operations shut down completely, Lili Huang, the company’s vice president of IR in Europe, tells IR Magazine.

‘Our casino operations, the largest part of the group, were suspended on April 2 by order of the Cambodian government,’ she explains. But the decision was only announced on March 30. ‘We had two days to prepare for the temporary closure, which was a task given that most of our 9,000 staff were in the gaming operations and the facilities that supported gaming such as food and beverage outlets.’ NagaCorp announced the closure along with its Q1 results on April 1.

By that point, however, lockdowns and business shutdowns were hardly new and Huang says the market likely anticipated it ‘as there was little movement in the share price. This was probably because all other gaming facilities in the region were already shut by the time Cambodia took the same approach.’

NagaCorp is known for its emphasis on transparency and good governance. Its website states that ‘founder and controlling shareholder Dr Chen Lip Keong’s emphasis on managing a First-world company in a developing nation – with transparency and compliance aligned to global best practices – sets the standard of governance for the company.’ This means that just because operations might have shut down, that’s no reason to stop updating investors.

‘At the beginning of the closure, I had a lot of investors asking what was happening on the ground in Cambodia and, more generally, in Asia,’ explains Huang. ‘Then I realized that there was a need for regular updates because most investors were shut out from the region and were not necessarily getting the information from the brokers. And all of them were investing in companies that might be impacted by the travel restrictions and lockdowns in the region.’  

So Huang started putting together a regular newsletter for investors – which she says are mainly Asia-Pacific or emerging markets specialists (noting this type of newsletter wouldn’t necessarily work well for investors with other focuses) – including updates on Covid-19 infections and deaths by country in the region, changes to lockdown rules and visa and travel restrictions. The newsletters give investors an at-a-glance update on what’s happening Covid-19-wise in Cambodia, Indonesia, Hong Kong, Macau, mainland China, Malaysia, the Philippines, Singapore and Vietnam.

In the first, sent on April 24, Huang told investors that ‘while there is no update on the temporary suspension of casino operations in Cambodia, situations in other countries in the region change regularly, which may also affect the government’s decision-making and economic recovery in Cambodia’, advising them that she would be sending regular updates on lockdowns and travel restrictions across the region.

The information included hasn’t changed too much over the months, Huang says, but now includes some news on developments in the Asia gaming industry, plus macro information to provide greater context. She also notes that as well as being useful in terms of their NagaCorp investment, some of the policy changes might influence investments in other companies and so are broadly useful for her investors.

While somewhat labor-intensive – Huang says each newsletter takes a couple of hours to put together ‘and becomes a commitment once you start it’ – there’s no fancy tech involved. ‘I rely on my IR colleague on the ground in Cambodia and good old Google news alerts,’ she says. ‘On top of those, I also use travel industry sources such as Newland Chase’s Covid-19 travel and immigration guide.

‘Many investors have commented that it helps to keep them up to date at a time when they can’t travel as freely as they’d like. I’ve found that investor calls have become more efficient as the time spent on explaining what’s happening on the ground has reduced, so we have more time to talk about the operations.’

Whether and how these continue in the ‘new normal’ depends on demand, Huang says. For now though, ‘feedback has been overwhelmingly positive.’