KathyZhang8.16Kathy Zhang, Chairwoman and co-founder of Financial PR Group, at the gong ceremony for the listing of FPR subsidiary Shanghai Shihua Financial Information Service. (Her image is projected on screen as she spoke at the OTC stock exchange in Beijing).ASK any company or investor, if investor relations matters to share price performance. Hardly anyone would say, it doesn't.

However, what goes on in "investor relations" is not always apparent to those who are not involved.

Some insights were shared by Financial PR chairwoman Kathy Zhang. Take the case of Singapore Medical Group, which had the beginnings of a business turnaround recently. And it had -- confidential -- plans for M&A.

It could have gone alone in its efforts to tell its story. Just rely on its quarterly financial statements and its mandatory announcements on the SGX website. 

chart11.16Singapore Medical Group soars  -- from 15 cents at end-July 2016 to 42.5 cents at end-Oct. Chart: BloombergInstead it turned to investor relations. The FPR consultants distilled the business story, took management to meet analysts one-on-one, organised presentations for groups of fund managers and others in the community, called the media....

The results: A share price performance of 184% year to date, which is more than any company can hope for.  Threeanalyst reports. And several media articles. Overall, a greater appreciation by the market for the business trajectory of the company.

Such outcomes are not the only fruits resulting from good investor relations. Take the case of AsiaTravel.com.

It is waiting for S$100 million in cash injection to scale up its business from a Chinese company, Zhong Hong New World, that Financial PR introduced. (See: 
).

Before that, FPR had a key role in inspiring Beijing Toread Outdoor Sports to acquire strategic stakes in AsiaTravel.com through a married deal and open market purchases of S$16 million. (See: 
)


These transactions reflect also the fact that Financial PR, which originated in Singapore, has grown its business and its network of contacts in Taiwan, HK and China.   

Cross-border investing takes the game (and the rewards) a lot higher. Financial PR started early on this path.  

The bi-annual Investment Summit in Shenzhen it organised this year is its eighth.

It has been getting bigger and better. In the most recent summit held on 8 July this year, it attracted 25 listed companies from Hong Kong, China and Singapore's industrial, manufacturing, environmental, entertainment, energy, Internet technology, real estate and finance sectors.

From Singapore, eight listcos participated: Singapore Exchange, Best World, Oxley Holdings, CNMC Goldmine, Federal International, Zhongmin Baihui, Q&M Dental and Trendlines Group.

"We collected the name cards of 197 investors, a record high," recalls Ms Zhang. "The keynote speaker was Dr. Shen Liang Jun, from the Investment Education department of the Shenzhen Stock Exchange.  His participation elevated the prestige level of our event."

One of the rewards for listcos which participate is, their post-conference share price performance typically would be positive, she adds.

In addition, for Singapore listcos, "more of them are venturing into China, and we have been able to seek Chinese investors and business partners for some of our clients. FPR is able to open doors for them through conferences and other forms of meet-ups." 

FPR has, in some cases, assumed an advisory or consultancy role -- which conventional IR practice does not offer -- to enable clients to expand their business through M&A and other tie-ups with new business partners.

That has been boosted in recent years with with FPR’s venture into China in 2011, setting up Shanghai Shihua Information Service Co.

The network of investors and business partners that the IR company, Shanghai Shihua Financial Information Service, has built provides FPR opportunities to link them up with clients in Singapore, HK and Taiwan.

While Shihua, which listed on China's New Third Board in July 2016 has exposure to China, FPR has operated subsidiaries in Hong Kong for many years already.

All that further enlarges its footprint. As a group, FPR serves more than 250 listed companies.

Going forward, FPR is exploring what it is learning from China -- extensive use of social media to communicate corporate and investment stories to the community.


It's not just WeChat but online portals, where investors, listcos and IR agencies generate content.   

Kamal SamuelBe it in Singapore or outside, FPR's core function is to identify and then highlight the investment merits of clients and bring them to the "right investors" and the market as a whole, says Kamal Samuel, director of operations in FPR Singapore.

It's "performance investor relations", as in performance that results in greater valuation for the clients' stocks.

Mr Samuel says: "Despite a quiet market, there are stocks that can capture investors' attention through investor relations because, at the heart of it, they have been suffering from inefficient information flow."

RSchart11.16Riverstone's stock price has nearly tripled since the start of 2014. Chart: BloombergFinancial PR's performance-oriented approach has many cases of helping companies improve their stock valuations. Here, associate director Tok Chong Yap shares how he and his team lifted Riverstone Holdings:

"After identifying the respective challenges Riverstone faced in investor relations, we carried out a study on the perception of Riverstone by sell-side analysts and funds. This led to us sharpening the overall corporate positioning and key messages to be communicated to the investment community. The study also helped us to comprehend the market’s expectations of Riverstone, in terms of growth prospects and returns as benchmarked to industry peers.

"We refined the investment thesis for Riverstone by focusing on its five-year capacity expansion plan. The clear communication to the market that this will lead to growth in the Group’s earnings established visibility for analysts and funds. This was paired with the management’s ability to deliver consistently strong financial performance.

"To increase the exposure of Riverstone to a wider base of institutional investors, the IR team underwent a rigorous training programme via site visits and frequent communication with management and operational personnel of Riverstone. This elevated the level of understanding of the IR team tremendously. Eventually, the responsibility of analyst and fund meetings was delegated to the IR team, where they stepped up as spokespersons for the Group. It is worth noting that Financial PR is an IR agency which handles the investor relations of listed companies but it was trusted by Riverstone's management to carry out the responsibilities of in-house investor relations officers.

"The delegation of IR activities to the IR team relieved Riverstone's management of their time to focus on the business operations which are critical in enhancing shareholder value. Being close to analysts and funds, the IR team was able to provide updated market intelligence to the management to shape and guide on a communication strategy with consistent messaging."

 

You may also be interested in:


 

We have 966 guests and no members online

rss_2 NextInsight - Latest News