Localizing Investor Relations Markis & Company (Asia) Ltd May 2012
Agenda• What is Investor Relations?• Investor Relations in Asia• IR Performance of Taiwan Listed Companies• IR Best Practices• Services• FAQ• Case Studies• Summary
What is Investor Relations?• Investor relations a.k.a. financial communications, shareholder relations• Investor relations is a strategic management responsibility that integrates finance, communication, marketing and securities law compliance to enable the most effective two-way communication between a company, the financial community, and other constituencies, which ultimately contributes to a companys securities achieving fair valuation. (Adopted by the NIRI Board of Directors, March 2003.) IR is not PR
Typical IR activities• Events / Visits ▫ Broker Conferences，Analyst Briefings ▫ 1-on-1 meetings，conference calls ▫ Non-deal roadshow• IR materials ▫ Earnings releases ▫ IR mobile apps, IR website ▫ IR and capital markets related presentations to the board• Corporate image ▫ Relationship management with financial media, analysts, and other financial stakeholders ▫ Sustainability report, annual reports ▫ Activities that improve transparency
IR and related activities in Asia Analysts and fund managers have a wide range of sources for company information
Taiwan companies lag in IR activities Few IR awards, most listed companies release the minimum information necessary
Benefits to active shareholderengagement• IR activities require continual interaction and engagement with shareholders and potential shareholders, in an effort to obtain support for the company’s business strategies.• The aim of an IR department is to assist in the realization of fair valuation through two way communication.• Listed companies can benefit from active shareholder engagement by expanding its shareholder base, increase liquidity, increase the company’s valuation, and help to establish a credible base for future fund raising.• 79% of analysts includes poor communication as a reason to downgrade stock valuations• 88% of analysts say poor disclosure drops ratings
IR Best Practices• Hire a professional IR firm• Develop a disclosure / communication policy• Designated spokesperson• Audit/evaluate IR policies and procedures• Monitor social media• Develop an annual IR communication plan• Develop a crisis communication plan• Evaluate IR activities• Utilize technologies• Understand investors and global financial markets• Understand current regulations and requirements• … and others
Latest trends and innovations• Activity webcasting with video/audio ▫ Many investors are unable to attend stockholders’ meetings and investor conferences. Companies can use direct Internet broadcasting (webcasting) to allow all investors to receive information from shareholders’ meetings and investor conferences.• Interactive interfaces ▫ Because some reports (e.g., annual reports) can be exceedingly large, many companies have transformed the files of such documents by giving them interactive interfaces. This saves on investors’ download times and speeds up searches for needed information.• Social Media ▫ Monitor and the use of social media by IR• Mobile Technology ▫ 34% of companies believe their target audience accesses their website via an iPad or another tablet ▫ 22% intended to add support for smartphones or create a iPad/tablet app during 2011 ▫ 18% would like to add iPad/tablet support to their online annual report
Services IR Planning and execution Investor IREducation Materials
Consulting Services• Establish IR departments, Events / IR planning, policies and Department Planning procedures auditing and design• Analyst briefings, analyst days, shareholder conferences, and IR Materials other IR event planning services• IR website and technology Investor Education consultation, planning, establishment, and maintenance
IR Publishing Services• IR Materials planning and Events / IR preparation – including investor guides, presentations, Department Planning earnings releases, etc.• Corporate governance reports – IR Materials including sustainability reports, corporate responsibility reports• Annual reports Investor Education• Analytical reports – shareholder impact, shareholder composition analysis, board presentations, and others
Investor Education Services• Senior management and board level IR and communication Events / IR training Department Planning• Employee training on IR policy and procedures IR Materials• Financial and investor education events to the public Investor Education• Development of the IR Industry
FAQ• What’s an appropriate budget for IR activities? ▫ Global - US$561,000 per year on average ▫ Asia - US$336,000 per year on average ▫ Asian small caps - US$160,000 per year on average• Internal or external IR? ▫ External for US/Europe, Internal for Asia ▫ External to start (0-3 years), during fund raising, then later internal• What’s the time commitment? ▫ Minimum is 4 quarterly conference calls, 1 annual meeting, 9-12 board meetings, 2-3 road shows / trips• Why should senior management and/or board members participate? ▫ better valuation – better bonus, better image – more sales, investor’s views – operational improvements.• What’s the typical team size? ▫ 4.3 persons in Asia ▫ 5.2 in China ▫ 59% of reporting lines is directly to the CFO
Mega Holdings (2886 TT) • IR / spokesperson – VP level officerIR Department • 25 analysts • Broker Conferences (6~11x per year) Events • Non-Deal Roadshow (once per year) • Financial Information • Annual Report • Credit Rating Website • Company Presentations • Stock Quotes / Dividend History • Multi-language corporate website / dedicated IR website
Yuanta Holdings • Spokesperson – Executive VPIR Department • 18 Analysts Events • None • Financial Information • Annual Report • Stock Quotes IR Website • Capital Change History / Dividend History • Multi-language corporate website / dedicated IR website
HIWIN Technologies • Spokesperson – Senior VPIR Department • 13 Analysts • First held on 4/ 30/2012 Events • Stock went from NT$251 -> $303 • Financial Information • Stock Information IR Website • Announcements • Chinese language only IR website
Summary• IR activities is a cost-effective method to help investors make the right decisions.• With proper planning IR activities can generate strong ROI to a company’s market value by providing a better corporate image, a more comprehensive knowledge about business strategies and direction, and a fair valuation.• Taiwan financial blogger 郭恭克 says ▫ IR is definitely a worthwhile endeavor, the cost is low and can multiple a company’s market value. Besides R&D and product marketing activities, IR is probably one of the more high return on investment, low cost, high value-add activity that a company can engage in.
Teddy Tsai Background Information• Prior to founding Markis & Company, Mr. Tsai was Deputy Head of Research in Asia at DnB NOR and was based at the bank’s regional headquarters in Singapore. In addition to his responsibilities for shipping sector coverage in Asia, he introduced innovative products such as the Experts@Lunch series of investor meetings and the Asia Energy, Offshore, and Maritime (EOM) Index.• From 2008 to 2010, Mr. Tsai was Head of Research at CLSA Capital Partners’ shipping fund, Pacific Transportation Asia, based in Hong Kong. He worked as part of the investment team, developing investment views on various shipping sectors including offshore supply, product tankers, dry bulk and container shipping. He was also involved in producing the fund’s business plan and in investment activities including due diligence, pre-investment evaluation and negotiations.• From 2003 to 2008, Mr. Tsai was responsible for equity research covering shipping stocks in Asia for Merrill Lynch, where he last held the position of Vice President. During his time there, he was ranked in a variety of external and internal broker surveys and developed innovative products such as a proprietary dry bulk supply-demand model and Baltic Dry Index forecasts.• Mr Tsai holds a BA in Economics and a BA in Political Science/International Relations, both from the University of California, San Diego as well as a Lloyd’s Maritime Academy Diploma in Ship Finance. He is also currently studying for a Master of Research degree through the University of London International Programmes.
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Contact Information Markis & Company (Asia) Ltd. Teddy Tsai (蔡鴻德) Managing Director +852 8127-7587 +886 910 723 698 email@example.com