Inflation fears, hybrid meetings and growing ESG expectations were just some of the topics up for debate at the IR Magazine Forum – Greater China, which took place virtually in early December.
Companies based in mainland China, Hong Kong and Taiwan came together to hear panel discussions on the latest IR trends affecting the region and advice for investor engagement in 2022.
Ajay Kapur, Asia-Pacific equity and global emerging markets strategist at Bank of America, kicked off the forum with a talk on the outlook for emerging markets. ‘I think we’re in a period where inflation will pick up, stay strong for the next few quarters and then begin to subside. And I think that’s actually a reasonably good environment for stocks,’ he said.
The market faces challenges, such as the strength of the dollar and tight monetary policy in China, plus the risk of central banks cutting back on stimulus too quickly, noted Kapur. In general, however, he said his view is ‘bullish and relaxed’, putting that attitude down to four factors: good liquidity, good earnings, good technicals and contained inflation.
Next up, IR teams joined a panel to explore how they make the most of management time. While the majority of engagement remains virtual, some speakers reported that they have been able to hold physical meetings this year for domestic investors.
‘We started to have hybrid events in the country, beginning at the start of this year,’ said Jenny Lai, vice president of investor relations at Lenovo. ‘This included panel discussions among our executives on preset topics. We also arranged two non-deal roadshows, one in Shanghai and the other in Beijing.’
In addition, Lenovo held one hybrid site visit, said Lai: ‘Our main research center in China is called Future Center in Beijing. We arranged a physical site visit… but at the same time, we [put it] online so investors that couldn’t join in person could participate in the tour and ask questions.’
The next part of the forum focused on ESG issues. First, Craig Dougas, vice president of depositary receipts at BNY Mellon, spoke about how companies can communicate credibly on their decarbonization pledges. Second, a panel tackled the growing demand for sustainability reporting and ESG targets across the region.
Shirley Kwok, head of investor relations and sustainability at ENN Energy, said her company benchmarks its targets against international peers and also aligns them with national commitments. As an example, Kwok referenced China’s goal to achieve carbon neutrality by 2060. ‘Our target will have to be at least aligned with this national target, or earlier than that,’ she said.
The penultimate session of the forum focused on China’s growing investor presence in Asia. Rui Hua Chang, group managing director of capital markets at ESR Cayman, spoke about the impact of joining the Stock Connect program, which makes it easier for mainland Chinese investors to trade Hong Kong-listed shares.
‘ESR got into Stock Connect in March this year,’ she said. ‘Definitely, the interest from Chinese investors increased tremendously after that. We also have [four] research analysts from Chinese brokerages covering us [plus one more on the way]. Every time we have interim results, we have them do the non-deal roadshows for us.’
The final session featured a panel on how the pandemic has changed investor relations. Nina Zhan, vice president of investor relations at 361 Degrees International, said there may be a misconception that Covid-19 has led to a lower workload for IR professionals, given the travel restrictions and limitations on activities like roadshows.
‘Actually, [on the] contrary, we are getting busier,’ she said. ‘You always need to squeeze in more virtual meetings on a daily basis. When you are traveling, maybe you can only conduct three or four meetings but right now you really have time to do the meetings more efficiently.’
To find out more about the IR Magazine Forum & Awards – Greater China or to watch replays of the sessions, please click here.
