‘I spent time planning new themes for non-deal roadshows’: Chinese companies take advantage of virtual outreach
The virtual IR environment is helping Chinese companies save travel costs, target new investors and conduct listing roadshows more efficiently, according to speakers at the IR Magazine Forum – Greater China 2020. But building personal connections and garnering investor feedback is more difficult, with virtual group meetings in particular lacking engagement.
Shirley Kwok, head of investor relations at ENN Energy, said the switch to virtual outreach had led to 30 percent more meetings in 2020, compared with the previous year, and more opportunities for senior management to join calls.
‘This year approximately 10 percent-15 percent of our meetings will be attended by senior management,’ she said. ‘Last year, they may only have joined a couple of meetings with the most important shareholders.’
The virtual environment has given ENN the freedom to explore new ideas, added Kwok.
‘I spent time planning some new themes for our non-deal roadshows – for example, to target investors in areas we don’t usually go to during our roadshows, like Australia and the Middle East,’ she said. ‘I also helped brokers to arrange with me an ESG-themed roadshow, to target European ESG asset managers.’
Group meeting challenges
Kwok noted, however, that virtual engagement can make it harder to gauge the effectiveness of a meeting, especially in a group setting.
‘[For] physical roadshows, I can see them face to face and can tell from their facial expression whether they like us or not – I can have that immediate feedback,’ she explained. ‘But maybe now they turn off their video. Sometimes in a group meeting, they also mute so it’s really hard to tell what their reaction is at that time.’
Speaking on the same panel at the forum, Florence Lip, senior director of investor relations at Yum China, agreed that online group meetings can lack interaction.
‘[For] virtual roadshows, if it’s a one on one, we usually try to turn on the video and see whether investors turn on theirs as well – that helps to engage,’ she said. ‘If it’s a group setting, then it’s very hard. We just don’t know whether they’re engaged or not. Quite a lot of times, there are no questions asked.’
Listing roadshow benefits
On the positive side, Lip said her company reaped the benefits of virtual engagement in September when it completed a secondary listing in Hong Kong, raising $2.2 bn and adding to the listing it has had in New York since 2016.
‘Our management couldn’t really travel,’ said Lip. ‘These virtual events certainly helped us to target the investors we wanted to target, which are back in China, Hong Kong [and] Asia.
‘Usually [with a] pre-listing, we only have a couple of days to do the roadshow. Our management really liked the idea that, compared with the first listing experience, this listing [had] a lot more meetings in a much shorter timeframe.’
Speakers on the panel also discussed the potential of video content to help fill some of the gaps left by travel and social restrictions.
Kwok said the lack of site visits is a ‘big’ issue given their popularity with analysts. In response, her company created videos of project sites to share with the investment community. The content not only showcased the locations but also included interviews with project managers and local government officials.
On the same panel, Jenny Huang, managing director for Asia Pacific at Euroland IR, said video is a good option for companies looking to add additional color to their outreach, but it is important to ensure the content is easily accessible.
‘Just look at how many mobile users we have today,’ she said. ‘You cannot expect everybody will be sitting at a computer using their laptop to read information about your company.’ For example, she said companies targeting mainland Chinese investors must consider whether the content will be available to users of the hugely popular WeChat application.
Lip said she doesn’t think virtual can replace in-person meetings but it will play a more important role in the future, even when physical meetings become an option again. She said her team has become ‘more tech-savvy’, while both investors and management ‘are now more open-minded [about] these virtual meetings’.
She added that some of her China-based colleagues had recently had the chance to return to physical meetings, but only briefly: ‘There were some new [virus] cases [that] popped up again, and therefore they switched back to virtual meetings. I think, until you have the vaccine widely available, we have to stick with virtual meetings for a while.’
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