How Anta Sports demonstrates the value of IR to management
‘IR is like planting a tree,’ says Suki Wong, investor relations director at Hong Kong-headquartered Anta Sports. ‘It requires a lot of time and commitment and eventually you will see fruit – though the result isn’t always quantitative.’
Wong points to a number of quantitative metrics that can be used to highlight the effectiveness of the IR program to senior management, including ‘the number of meetings, the number of conferences or roadshows or the number of brokers that cover the company – regardless of whether they give you a buy, sell or neutral rating’.
Suki Wong, Anta Sports
When it comes to IR at Anta, though, there are two areas the C-suite is most likely to look at: share price and feedback. In both Measuring & Demonstrating IR: Part I and Part II, a notable number of IROs point to the share price as a key metric in the measurement of investor relations success, which seems somewhat surprising. But while Wong maintains that ‘IR cannot be responsible for the share price, because there’s so much involved in that’, issues around the share price – such as volatility – are high on Anta’s investor relations agenda.
While you might want low volatility and a consistent message, showing off your IR assets is easiest when you’re dealing with something like a volatile share price, says Wong. In fact, ‘the IR program shines when the share price is fragile,’ she adds. The firm’s 2007 IPO price was HK$5.28 ($0.68), while the share price at the time of writing is HK$22. ‘But our 52-week low is HK$14,’ notes Wong, ‘so there is a lot of volatility.’ You have to be proactive with such volatility, she advises, talking to the shareholders not just when the share price is low, but also when it’s high.
This applies to all areas of the program, of course and, when asked about the distinction between corporate success and IR success, Wong maintains that ‘even if you are outperforming the market and are a leader in your sector, you still have to communicate well.’ Having good connections with the market is important for all IROs but as a company that is heavily exposed to the Chinese market, Anta ‘sometimes has to deal with market rumors. As an IRO, it’s very important for you to have good connections to the market and to spot what is going on,’ Wong adds.
This leads her to the other area where she feels the IR team can really show its value to management: feedback. This is summarized after a roadshow, interim or quarterly results, or simply when something happens that the investment community is talking about. And for Wong, it’s the negative comments that are particularly important as they afford management a different perspective and let it take steps to try to solve any problems.
‘At Anta, our management is very open-minded and supportive of IR,’ she explains. ‘Because of this, it takes our suggestions on board and will often adopt changes based on the feedback we give.’ To really be able to do this, though, Wong says ‘management has to give authority to the IR department so it has the right to access all news and to ask the necessary questions of the different departments within the firm.’
It helps to have an open-minded management team but even without that, Wong’s advice to others is to maintain the principles of good investor relations as you would when communicating with shareholders. ‘Be transparent and honest with management,’ she says. ‘And don’t be afraid of a negative message.’
This article appeared in the spring 2017 issue of IR Magazine