IR magazine talks to Mable Chan about her IR team’s success in the IR Magazine US Awards
For Li & Fung, the winner of the award for best investor relations in the US market by an Asia-Pacific company, the unfortunate thing about the IR Magazine US Awards this year was the timing: the event was on the same day as Li & Fung’s results announcement in Hong Kong.
The result? Mable Chan, head of corporate communications and investor relations at the company, was unable to collect the award herself. But Ron Ventricelli, executive director and COO for LF USA, the company’s New York-based operation, seemed happy enough to step in on the night to receive the award and accept the applause on Chan’s behalf.
Chan’s department is just five-strong, yet it runs IR and other external communications for the Hong Kong-listed multinational consumer goods export and logistics giant all around the globe. What’s more, her team does the IR without help from external consultants or from hijacked local employees in any of the group’s offices in New York or anywhere else around the world.
So what’s the key to the success of this lean team outside the domestic market? ‘Well, we do lots of conference calls with US investors,’ Chan says. ‘And we travel to the US. We don’t like to use consultants, however: we prefer to do it ourselves first-hand because we know the company so well.’
That’s despite the fact that US investors account for about a third of Li & Fung’s equity ownership. ‘But a lot of US investors travel to China nowadays so a good proportion of our shareholders come to visit us in Hong Kong on the way there or back,’ notes Chan. ‘And we have a good group of very long-term investors that know us well.’
No change
For Chan, the keys to successful investor relations are ‘predictability and transparency’. That all starts with the three-year planning cycle Li & Fung works to.
‘We try to be as transparent as possible,’ says Chan. ‘We publish our three-year targets and stick with them throughout; it’s quite strict. We won’t ever revise the plan. That way shareholders know that, even if we fail to achieve the targets, we will stretch ourselves as far as we can.’
As Chan says, senior executives don’t mind having shareholders on their backs, pressing them to achieve the goals.
Li & Fung has just announced its Three Year Plan 2011-2013 and Chan is clear that, although the company failed to meet the targets in the last one – unsurprisingly, given the bumpy economic ride of 2008-2010 – ‘our investors know we did the very best we could.’
The other aspect is predictability, which Chan sees as crucial to the company’s IR program. Every year the company tries to attend the same four broker-arranged investor conferences: the Goldman Sachs Retail Conference in New York in September; the CLSA event in Hong Kong, also in September; Morgan Stanley’s Singapore conference in November; and the Credit Suisse event held in Hong Kong every March. ‘We stick with these so our investors know what to expect,’ says Chan.
Either William Fung, group managing director, or Bruce Rockowitz, president of Li & Fung (Trading), attends these conferences with the IR team. Typically Fung or Rockowitz gives a presentation and stays on for the rest of the day to do some follow-up meetings. ‘Then the IR team takes over,’ explains Chan.
Everything discussed so far relates to Li & Fung’s dealings with the company’s investors. What about the analysts? ‘We have about 20 sell-side analysts following the stock,’ says Chan. ‘And we maintain regular dialogue with them. Some of them have followed us for a very long time.’
Ron Ventricelli (left), executive director and COO for LF USA, collects the award for best investor relations by an Asia-Pacific company in the US market from Marianne Erlandsen of BNY Mellon Depositary Receipts (center) and Pimm Fox (right) at the 2011 IR Magazine US Awards. Li & Fung is the first Hong Kong company to win this award. Previous winners include Infosys, Sony, Toyota, TSMC, Samsung and Qantas. Li & Fung has, however, won two previous IR Magazine Awards: in 2006 and 2007 managing director William Fung won best IR by a CEO at the IR Magazine Hong Kong and Taiwan awards.
Li & Fung trivia
- Li & Fung has 240-odd offices and distribution centers in more than 40 countries.
- Fung Pak-liu founded the company in 1906 in Guangzhou to export silk, porcelain and fireworks.
- In Chinese, the word Li means ‘profit’ and the word Fung means ‘plentiful’.
- In 1989 the Fung brothers, Victor and William, took the company private (it was relisted in 1992) in Hong Kong’s first management buyout.
