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Jan 02, 2019

Spotlight on Asia: What every IRO should be thinking about heading into 2019

This article was produced by ELITE Connect and originally published on the ELITE Connect platform

In the final installment of our series on future gazing into 2019, we turn our attention to Asia and hear the thoughts and plans of Hannah Yulo, chief investment officer at DoubleDragon Properties Corp, and Heather Xie, IR manager at China Modern Dairy Holdings.

What’s been your main IR focus in 2018?

Hannah Yulo: We’ve allocated our IR time to a more targeted audience of investors in 2018, specifically those focused on high-growth stories like ours. We’ve spent a meaningful amount of time on site visits and one-to-one update calls with individual fund managers that are committed to investing for the medium to long-term.

Heather Xie: We’ve had two main focuses this year: we’ve been working on developing and improving communications with our existing investors and analysts to make the process run more smoothly, and we’ve been identifying new potential investors and establishing connections to share more about our business. 

What are the main topics on your mind when you’re thinking about this year?

HX: We’ll be building even further on our investor communications and continuing to enhance our presence in the marketplace with more efficient interaction. We’re also planning to try out new forms of communication, including reverse roadshows.  

HY: The rising interest rate environment is a big consideration but we’re fortunate that we have fully secured our funding requirements ahead of our 2020 plan, with long-term funding secured at fixed interest rates for the duration of our seven to 10-year tenures. The company’s yield on cost for future projects will be substantially superior to those of property companies that are only securing their funding today, as benchmarks have moved up considerably. 

How do you think the IR landscape in Asia will change and develop in 2019?

HY: I believe there will be a major reallocation of portfolio investments in Asia, particularly continuous foreign outflows from markets like China, due to the effects of the trade war, rising US Treasury yields and other issues. This will lead to more inflows in emerging markets like Bangladesh and Myanmar, which are expanding by more than 7 percent per year. India, Vietnam and the Philippines are also strong contenders to benefit from these flows as their markets are considerably more mature.

HX: I think general appreciation of IR roles continues to grow in Asia. As such, corporates will increasingly pay more attention to the IR role and the IR function as a whole, and we can expect to see better investor communications as a result. 

What do you feel the main issues for IROs in general will be this year?

HX: In Asia, we’ve seen some volatility and this can be challenging to deal with. IROs need to focus on the positives, maintaining efficient communications and delivering confident messages to investors when markets go low and do not reflect the intrinsic value of the company.

HY: I believe the main issues for IROs will be identifying and responding to country-specific risks as new fund flows will focus attention on economic policies and political outlook. I foresee a great deal of attention shifting to country-specific risks involving Vietnam and the Philippines because the two countries are quite similar in many aspects, especially with regards to their growing workforces.

Can you share some of your 2019 plans with us?

HY: As a newly listed property company that aims to complete a diversified portfolio of 1.2 mn square meters of leasable space by 2020, our business is developing fast. As our properties start to turn over and commence their operations, we will be able to have more meaningful discussions with our investors and we will inevitably start to attract a whole new slew of investors as we grow further. This year will be an exciting and opportune time to engage with them.

HX: We’ve already planned some of our regular activity, such as more vivid forms of results announcements, but we’re also planning more engagement with potential mainland China investors. We’re currently working on our plans for the best ways to do this. 

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