Highs and lows of Asian companies in 2009
Lenovo – Hong Kong
‘We devote a lot of effort to enhancing investors’ understanding of the company by organizing investor days, roundtables and webcasts, as well as actively participating in investment conferences and roadshows,’ explains Lenovo vice president of IR Gary Ng. ‘The PC industry was hard hit by the global economic crisis and, consequently, the operating environment for Lenovo became extremely challenging.’
Lenovo also underwent a major management change in early 2009. ‘The main challenge has been building investor confidence in the new management and the firm’s ability to turn around the business,’ Ng explains. He says his goals for the coming year are to revamp Lenovo’s IR website and to involve senior management more in IR events and direct dialogue with investors.
China Vanke – China
The company had a busy 2009, undergoing an A-share capital raising. ‘At the time we proposed the capital raising, issuing stock was treated negatively by the capital markets. Following dedicated efforts in communication with our investors, however, we garnered 99.99 percent shareholder approval for our fund-raising,’ explains Kelly Lee, officer of the board at China Vanke. ‘We have been trying to create better communication with our investors by launching online initiatives.
‘It’s not just presentations, conferences, roadshows, and investor visits that have increased in frequency. We have also launched an online register system to help improve efficiency and transparency.’
Ping An Insurance – China
Perennial IR Magazine Award winner Ping An likes to go the extra mile when it comes to communicating with investors. It took the brave step of publishing the cell phone numbers of its IR team members on its website. ‘We believe there are few listed companies around the world that have made it their practice,’ explains Jun Yao, secretary of the board of directors at Ping An.
The insurance company also undertook a major strategic investment in Shenzhen Development Bank, one of the largest transactions by value ever made domestically in China. ‘Since its announcement, Ping An has been proactively communicating with investors, regulators and the market at large, gaining their recognition. The transaction was approved by more than 99 percent of the votes in our shareholding meetings,’ Yao states.
Olam – Singapore
The firm, which listed in 2005, has two people in its IR team, led by Rajesh Chopra, head of corporate affairs and IR, who has been with Olam for 12 years. He is joined by IR manager and former IR Magazine Award winner Chow Hung Hoeng.
‘This year we made a shift in our corporate strategy to enhance our commitment to various attractive niche activities. We had to beef up our efforts in communicating our renewed strategy and the rationale behind it,’ Chopra explains.
‘To implement the strategy, we had to campaign for equity and debt capital and update shareholders on the planned use of the funds raised. It is critical to update the investors on a regular basis about our growth plans, capital structuring and how we are putting their money to good use.’
City Developments – Singapore
Singapore-based City Developments (CDL) does not have a dedicated investor relations team – but it does have a dedicated chief financial officer: Goh Ann Nee.
‘One of the areas in which we have received positive feedback is the holding of our media and analysts briefings for our half-year and full-year results in the morning instead of in the evening,’ Goh notes. ‘This allows the media and analysts to digest the released information prior to the briefing and provides for a more in-depth Q&A session with management.’
CDL has also taken the extra step to voluntarily disclose its environmental and social performance by publishing a yearly sustainability report, based on the Global Reporting Initiative guidelines.
‘During the financial crisis, the trend for raising capital was to adopt traditional methods such as rights issues and convertible bonds. One of the challenges we faced was explaining our reluctance to follow that herd instinct,’ Goh recalls.
Instead, the company decided to take the more unorthodox route of issuing Islamic bonds – known as sukuk – and in 2008 announced the pioneer issuance of Singapore’s first sukuk-ijarah unsecured financing arrangement, by completing a S$1 bn ($706 mn) Islamic Trust Certificate Program.
‘This allowed us to focus on exploring emerging avenues for growth,’ Goh explains. ‘Being a pioneer in this area meant we had to face a new set of IR communication challenges: we had to explain the concept of Islamic financing, which was fairly new in Singapore, and address an entirely new pool of global investors from the Islamic community.’