spotlight on asian ir part 1: room to improve...8 | ir magazine investor perception study asia...

8 | IR MAGAzINE INVESTOR PERCEPTION STUDy ASIA 2011/2012

sPoTLiGHT on AsiAn iR

Part 1: Room to improveiR insight reveals the investment community’s top five wishes for Asian iR

During the research for IR magazine’s Greater China and South East Asia awards, the investment community heaped praise on those companies worthy of winning an award. At the same time, they poured scorn on the

worst IR practices in the region. In particular, when investors and analysts were asked about the improvements they would like Asian companies to make to their IR offering, the great majority of respondents from all countries expressed concerns about the IR service they receive.

‘Generally IR here is terrible,’ says a particularly disconsolate sell-side analyst from Hong Kong. ‘Companies take no advice from investors and they hide behind the excuse of selective disclosure. In the eight years I have been covering Asian companies, IR has not advanced at all.’

By region, Singaporean companies are deemed to offer the highest standard of IR. Investors and analysts consider their IR programs to be more sophisticated than those in other countries. Consequently, the few respondents who say they are satisfied with the level of IR service are mostly based in Singapore. By contrast, IR at Chinese companies is considered to be particularly unsatisfactory, by both respondents in mainland China and those based elsewhere.

Top of the investor community wish list is increased trans-parency and disclosure, which is mentioned by almost half (48 percent) of the 105 respondents in Asia who took part in the poll.

The demand for more information from the market is underlined by the closely related requests for more frequent and detailed reporting in third place (31 percent) and increased guidance in fifth (10 percent).

Greater access to senior management is in second place (32 percent), although the calls for improvements in this area vary from region to region.

In fourth place, just over one in 10 respondents call for better-qualified and more accessible IROs. This suggests the issue of primary concern for the investment community is the information and access Asian IR professionals have at their disposal rather than their ability and availability to convey it.

Below the top five areas, timing, plan-ning and scheduling are other frequently mentioned areas for improvement. A particularly popular request within this field is for advanced disclosure of companies’ quiet periods around results.

‘I would like a clear breakdown of the timings around a company’s results, so I can plan my time better,’ says a buy-side analyst from China. Prior knowledge of topics of discussion at management meetings and presentations is another repeatedly mentioned request. ‘I would like to see a schedule of topics to be discussed at management meetings before the meeting takes place,’ explains a sell-sider from Singapore. Again, these could both be characterized as falling under the umbrella of greater transparency.

1 IncreAsed trAnsPArency And dIscLosure

All across Asia the investment community is calling for increased transparency and disclosure from the companies it invests in or covers. According to almost half (48 percent) of the respondents, a higher level of disclosure is required in published information, corporate websites and in the information IR professionals provide in conversations and meetings. ‘At present, companies tend to be vague

Top of the investor community wish list is increased transparency and disclosure

Increased transparency and disclosure

Increased access to senior management and more meetings

More frequent and detailed reporting

Better-qualified and more-accessible IROs

Increased guidance

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Top five areas for improvement in Asian iR

IR MAGAzINE INVESTOR PERCEPTION STUDy ASIA 2011/2012 | 77

30 | lenovo30 Lenovo Group Limited (china) C

listing information

small/mid-cap Hong Kong stock Exchangecomputers

Ceo Mr YAnG Yuan Qing

CFo Mr WonG Wai Ming

Head of iR Mr Gary nG – vice president of investor relations

iR team Ms Katie KunG

iR team size six

Award-winning iR

Best iR during a corporate transaction 2011 short-listed for best corporate governance and disclosure policy – china 2011 Best website/webcasting in Hong Kong 2010

Contact information

www.lenovo.com [email protected] +852 2590 022

Investor/analyst feedback

detailed disclosure

‘Lenovo has consistently provided detailed disclosure’ – buy side, Hong Kong

Useful reporting‘The annual report Lenovo produces is full of useful information. Most companies just publish the legal requirements, but Lenovo’s goes further’ – buy side, Hong Kong

supportive‘Lenovo stands out as offering the most comprehensive support to the investment community’ – sell side, Hong Kong

TOP 30

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CHINA

Lenovo Group, Chinajoint venture with PC division of Japan's NEC

Li & Fung, Hong Kong acquisition of IDS Group

China Resources Enterprise, Hong Kongacquisition of stake in Kingway Brewery

Taiwan Cement, Taiwan several acquisitions including Kaili Shiu

China Merchants Bank, China rights issue

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Best investor relations during a corporate transaction

On January 27 this year, Lenovo announced it was forming a joint venture with the PC division of Japan’s NEC. Immediately after the

news went live, the IR team sent out invita-tions to key investors and analysts to attend a webcast with the CEO and CFO, which was scheduled to begin within three hours of the invitations. ‘We didn’t want to hang around too long before giving people the information

Best investor relations during a corporate transactionfirst-hand,’ says Gary Ng, vice president of IR at Lenovo.

Following the webcast, IR also organized back-to-back calls with the sell side. The 15-minute individual briefings gave the 20-plus analysts covering Lenovo the opportunity to ask any questions they didn’t want to ask during the group forum.

The schedule for that day in late January was tight, remembers Ng. But for him and his six-person IR team the preparations were already well under way long before this. As soon as the team was informed about the proposed deal, it had to familiarize itself with the format of the M&A transaction, understand the financing and assess what the market would expect from the deal. ‘We had an additional pair of eyes look at it from the investors’ and analysts’ perspective,’ Ng explains. ‘It is important to anticipate how they would look at the deal and see what information we would need to provide.’

Top of the list of questions from the investment community was: why invest in Japan when the PC market in the world’s third-largest economy has been slowing in the last few years, not to mention the economy overall? The answer was simple, says Ng. Japan is still the third-largest PC market in the world. Lenovo may have been number one in China before the NEC deal, but it had only a 25 percent share of the Japanese PC market. Now Lenovo is number one in Japan as well. Tying up

78 | IR MAGAzINE INVESTOR PERCEPTION STUDy ASIA 2011/201278 | IR MAGAzINE INVESTOR PERCEPTION STUDy ASIA 2011 /12

with a Japanese company like NEC has enabled Lenovo to penetrate a local market that can often be difficult to access for an overseas corporate.

Lenovo had conducted many other M&A deals before the NEC joint venture. The biggest was the acquisition of IBM’s PC division, says Ng, although that was before he joined the IR team five years ago. Since the NEC deal completed, moreover, the company has already acquired its next business. This time it has expanded its PC coverage in western Europe with the takeover of German tech company Medion.

What makes the NEC transaction special, however – not to mention particularly delicate from an IR perspective – is the partnership it involves between two corporates from different countries. Japan and China have two very distinct cultures, of course. But they also have two separate cultures when it comes to IR and corporate communications. As the head of IR at Lenovo remembers it: ‘Some of the information we think it’s okay to disclose, NEC doesn’t necessarily feel comfortable communicat-ing to the market, so we needed to be quite careful about what

Fosun is said to be the biggest private enterprise in China. Four graduates from Fudan University founded the Shanghai-headquartered industrial conglomerate back in 1992 and it listed in Hong Kong in 2007. Since then,

to disclose, why to disclose it, and when.’ To this end, the IR teams at Lenovo

and NEC had to work closely on the communications for the deal. For instance, the practicality of two teams vetting every public announcement meant it took longer to prepare a release. ‘With a big Japanese counterparty, you need to be in sync with it, respect the cultural difference, work together and engage with it as early as possible,’ advises Ng. ‘It takes time. Just walk it through what you expect and why you have to disclose certain information.’

The joint venture launched in July 2011. From then on the new venture fell under the Japanese operations of Lenovo as an unlisted subsidiary. As such, Ng does not expect to be making any separate releases in respect of the joint venture in future.

30 | lenovoTOP 3020

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2GREATERCHINA

31 | Fosun international

Fosun International, China

China National Building Material Company, China

Anhui Conch Cement, China

China Resources Cement, Hong Kong

Baosteel, China

Taiwan Cement, Taiwan

Citic Pacific, Hong Kong

China Textile Machinery, China

Singamas Container Holdings, Hong Kong

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Best investor relations in sector – industrials (including construction & conglomerates)

AWARd-WinninG coMPAniEs ouTsidE THE GREATER cHinA ToP 30

Best investor relations in sector – industrialsthe chairman and co-founder of Fosun, Guo Guangchang, has made public his intention to transform Fosun into an investment company in the mould of Warren Buffet’s Berkshire Hathaway.

In doing so, Fosun has recently invested in a Greek luxury goods brand and entered a life insurance joint venture with US insurer Prudential Financial. That is on top of Fosun’s existing business interests in sectors as diverse as pharmaceuticals, property, steel, mining and retail, which last year made the company the second-most profitable in China last year, the fourth-biggest by assets and – in a sign of the company’s social conscience in spite of its size – the fourth-biggest taxpayer.

Pity the IR team that has to explain this ever-expanding list of businesses to the investment community. Until recently, that task fell to Dr Shi Qifang. Shi spent a little more than a year in the role before moving on to other responsibilities at the company.


Above all else, the former head of IR at Fosun believes investors value an IR professional who really understands the firm. That means an IRO must be acquainted with every aspect of the business, from the strategy and financial data to the mindset of the senior management team.

Under Shi’s guidance, the IR team at Fosun strived to make the company easier for investors to understand by responding to their particular requests and concerns. ‘For example, investors are often puzzled by what would be the best financial metrics to evaluate the performance of Fosun,’ says Shi. ‘So we introduced the concept of NPV [net present value] and we suggested that investors track the growth trend of NPV to understand the growth trend of the intrinsic value of the company.’

Two additional concepts introduced by the investor relations team – the ‘industrial profit’ and the ‘investment income’ – are intended to make it easier for investors to understand how the bottom line grows at the diversified investment holding company and industrial conglomerate.

The former head of iR at Fosun believes investors value an iRo who really understands the company. That means an iRo must be acquainted with every aspect of the business, from the strategy and financial data to the mindset of the senior management team

31 Fosun International (china) C

listing information

small/mid-cap Hong Kong stock ExchangeMiscellaneous manufacturing

Ceo Mr LiAnG xin Jun – vice chairman and cEo

CFo Mr dinG Guo Qi – executive director, senior vice president and cFo

Head of iR Ms cHEn Jie – general manager of investor relations since July 2011 (previously dr sHi Qi Fang)

iR team Ms du Yue, Mr cHEn Pu, Mr schneider cHou

iR team size Four

Award-winning iR Best iR in sector – industrials (including construction & conglomerates) 2011

Contact information [email protected] [email protected]

+86 21 2315 6830


iR team strength‘Fosun international invests well in its iR team, some of whom are former analysts and fund managers. They talk to investors in a very open way, even about weaknesses. The iR there is of such a high standard that there is nothing that could improve it’ – sell side, Hong Kong

Accessible

‘As one of the biggest conglomerates in china, Fosun gives very good access not only to the iR team, but also to senior management and divisional heads, who are able to provide more detailed information. in terms of requests to visit various sites, these are nearly always granted and are useful because you can talk to the people working there and get another viewpoint’ – sell side, Hong Kong

Looking back at her year in charge of the IR team, Shi does see more room for improvement in Fosun’s IR practice. Mainly this is in the way information is collected and analyzed and also how it is presented and distributed. High-quality video conferences can be a good alternative to costly global non-deal roadshows, she says. She also sees a future for sophisticated analytical software, coupled with a detailed and complete database to dissect information on potential investors and company peers.

There are limits to this, however. Shi is not sold on investor patterns and investment habits, nor does she buy into social media for IR. Chen Jie filled the vacated head of IR position in September 2011. Whether the new general manager of investor relations will feel any differently, we will have to wait and see.


2 | Capitaland2 capitaLand Limited (singapore) CCC

listing information

Large capsingapore ExchangeReal estate

Ceo Mr LiEW Mun Leong

CFo Mr Arthur LAnG (formerly Mr olivier LiM)

Head of iR Mr Harold Woo – senior vice president of investor relations

iR team Mr cHEonG Kwok Mun, Ms Eileen LEE, Ms subathra BALA

iR team size Four

Award-winning iR

Best iR officer 2011 Best iR by a cFo 2011 and 2010Best iR in sector – real estate (including property development) 2011Grand prix for best overall iR – large-cap 2010

Contact information

[email protected] [email protected]

+65 6823 3276


Best site visits ‘capitaLand provides the best site visits, including some overseas’ – sell side, singapore

iR benchmark‘The iRo at capitaLand, Harold Woo, is excellent. in fact it is the performance of the iRo and his team that has informed my nominations’ – sell side, singapore

Accessible ‘We get better access to the cEo at capitaLand than with other companies’ – sell side, singapore

Complete package

‘The whole iR package at capitaLand works well’ – buy side, singapore

strong team‘capitaLand has a large iR team and we meet with two different iRos. The presentations are always informative, which is not the case with all companies’ – sell side, singapore

Proactive site visits

‘Every time capitaLand acquires a new property it offers investors an opportunity to view it. Extremely helpful guidance is also provided on each acquisition’ – sell side, singapore

Better communication

‘Although capitaLand provides good access to management and holds good site visits, it needs to explain the difficulties as well as highlighting the good points’ – buy side, singapore

Room to improve

‘capitaLand is better than most at the updating process, but there is still room for improvement’ – sell side, singapore

Harold Woo has reclaimed the best investor relations officer award he last won in 2009. He came second in 2010, but this year the senior vice president of IR at CapitaLand has scooped the top IRO prize alongside

vice president of IR Cheong Kwok Mun. The joint award is a sign of the IR team’s strength at the

Singapore-based real estate developer. Now that Woo is eight years in the job, it may also be an indication of the company’s vaunted succession planning at play. ‘Each of us at the senior level is supposed to have groomed a successor, either from

internally or externally,’ explains Woo. ‘We have a list, which we actually start from the day we join.’ Far from being a gimmick, these lists are taken seriously and are frequently updated, he adds.

At the moment, Woo claims to have two candidates in mind to head up the IR team. He is meant to rank his choices, although he freely admits that the rankings are liable to switch around from time to time. A few

Best investor relations officer

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clues about his likely successor can be taken from the characteristics Woo is looking for in a successful candidate, such as a passion for the job, the right skill set, commitment and the ability to work well with other colleagues.

The last quality is a particularly important attribute for the IR head at CapitaLand – past, present or future. The immediate IR team of three may be relatively small in number, but there are eight Capita listed entities in total, each with its own IR team of at least two persons. That makes an extended IR team of at least 17 IROs, all of whom are nominally under the group-level head of IR.

Many of these companies, like CapitaCommercial Trust, are short-listed alongside CapitaLand in this year’s awards. CapitaMall Trust even fi nishes second to CapitaLand in the best IR in sector award for real estate (see page 92).

Woo is responsible for coordinating the IR approaches of each of these satellite teams. ‘Two years ago I started formal quarterly meetings where all of us will huddle together before the reporting season,’ he says. ‘We exchange key messages and make sure there is alignment there. Then we do a lot of

coordination in terms of attending conferences and non-deal roadshows, because we want to try to make sure we spread it around. All of us use one brokerage house.’

On top of this, Woo attends the board meetings of each of these listed entities, including his own. It is an indication of how the head of investor relations is brought into management

How and where have you been targeting investors?When i fi rst came on board, the share register was very skewed toward the local and the more traditional British pension houses and mutual funds. At that point the bulk of the money was still coming from the us, so i made a concerted effort to go out and meet with us investors. We caught the up-wave for the chinese market. Everyone was looking at china.

do you have many institutional investors from mainland China?We have, but they’re not that signifi cant. in fact, we were one of the fi rst corpo-rates to do a non-deal roadshow in china. The investors we targeted did buy into the stock, but some of them have since traded out because of the market.

What are roadshows in China like?i remember walking into one of the fund management houses in shenzhen, where i thought we would be meeting three or four people They brought us into a mini-auditorium, which took in something like 40 people. it was obviously the fi rst encounter for them – they just wanted to see what a corporate presentation is like.

Harold Woo, senior vice president of investor relations, capitaLand

cheong Kwok Mun

CapitaLandCheong Kwok Mun & Harold Woo

SingTelSin Yang Fong

StarHubJeannie Ong

Oversea-Chinese Banking CorporationKelvin Quek

Keppel LandSerena Toh

United Overseas BankKelly Kang

Singapore ExchangeJohn Gollifer

DBS GroupMichael Sia

CapitaMalls AsiaCaroline FongPhilippine Long Distance Telephone, PhilippinesMelissa Vergel de Dios

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Best investor relations offi cer


discussions in order to increase his credibility with the investment community. It also shows the value accorded to the IR function within the upper echelons of the company. ‘This is not a silo function,’ explains Olivier Lim, CapitaLand’s former chief financial officer turned head of strategic corporate development. ‘Investor relations is considered part and parcel of each business unit’s responsibility.’

In return for his involvement on the strategic side, Woo is expected to deliver his opinion to management about likely investor reaction and current market sentiment. To this end he can draw upon his discussions with investors and analysts, his eight years of investor relations experience and his past career on the sell side.

Back in 1981, Woo started as an analyst in Singapore. After that he moved on to institutional sales and set up a sales office in London for a Singaporean brokerage firm. Taking on the top IR role at CapitaLand in 2003 was his first job in investor relations. He sees the career change as a natural transition for a former sell-sider. ‘I used to joke that while I once had many love affairs with many companies, now I only have one love affair with one company,’ he says.

Naturally, Woo brought some preexisting ideas about IR with him from the sell side. While in London during the late 1990s, he says a traditional English broker schooled him in the ‘my word is my bond’ style of doing business. ‘It’s all relationship,’ says Woo, in honor of his mentor. ‘Build a relationship with the analysts, try to be supportive of them, help them understand and analyze and build their model.’ It helped, of course, that Woo already had some existing relation-ships with these market participants from his own sell-side days.

A few internal relationships have also served Woo well over the last eight years. For instance, he praises management at the company for having the foresight to recognize the value in making itself available to investors and analysts. Equally, Woo values the rapport he has built up with the recently retired head of corporate communications at the company – so much so that he believes the company’s many investor relations accolades owe much to the close collaboration between these two distinct departments. As Woo puts it, ‘you need both hands to clap.’

The fruits of CapitaLand’s relationships with analysts, management buy-in and communications efforts are harvested at the company’s site visits. One recent site visit involved the sell side and the media as well as business heads and other management. ‘Sometimes the media call up analysts to reinforce their story and to get their opinion, so it helps when they know each other a little better,’ explains Woo.

The investors clearly like this approach, too, judging by the multiple mentions the site visits get in the company’s feedback. ‘CapitaLand provides the best site visits, including some overseas,’ says one unequivocal sell-sider from Singapore.

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Best investor relations by a CFO

In August 2011 Olivier Lim became head of strategic corporate development at CapitaLand. Lim is a three-time winner of the best IR by a CFO award. He won the inaugural award in this category back in 2009 and he has held onto it

ever since. He is also this year’s highest-scoring pan-Asia CFO.

The new job will be good news for Lim’s old CFO peers, since it will leave a big opening in the field for next year’s awards. It is clearly good news for Lim, too, because – judging from his comments – the shift toward even greater responsibility for strategy formulation is a more natural fit for this unlikely CFO.

Lim’s background prior to CapitaLand was in real estate investment banking. He was surprised, therefore, when the CEO of CapitaLand, Liew Mun Leong, first asked him to become CFO of the property developer six years ago. ‘When [Liew] first asked me to be CFO, I said, You realize I am not a chartered accountant? And he said, Precisely!’, recalls Lim. In his view, the level of trust and confidence the CEO has shown

CapitaLandOlivier Lim

United Overseas BankLee Wai Fai

SingTelJeann Low

Amtek EngineeringWon Lein Ng

Fraser and NeaveHui Choon Kit

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Best investor relations by a cFo


in him, both in his initial appointment and ever since, has been a key part of his success as a chief fi nancial offi cer.

This included being given a seat on the boards of almost all of the strategic business units and investment committees, right across the group’s listed entities. The CFO was also seen as a focal point for assisting the chief executive and the senior management team at a strategic level, and for capital management.

On the investor relations side, Lim believes this type of exposure is critical for any chief fi nancial offi cer who is expected to communicate business strategy to investors confi dently and consistently.

‘Investors will know within fi ve minutes whether a CFO or IR head has any clarity in the strategic direction of a company,’ he says. ‘It is thus very important for CEOs to recognize this and to ensure their CFOs and IR heads are involved in up-to-date strategic thinking on the company and, if possible, the strategic road map.’

Since Lim’s tenure bookended the global fi nancial crisis, he has had plenty to communicate to the market during his six years as chief fi nancial offi cer of

Capita-Land. The company underwent a signifi cant transformation in that time, as well – what was once a Singapore-centric real estate developer has now changed into a regional real estate group, Lim explains, with a bigger geographical footprint and a diversifi ed business, adding real estate investment trusts and fund management to the traditional business of shopping malls and serviced apartments.

The former CFO’s guiding principle for communications during this metamorphosis of the company and the macro economy has been the importance of context. The company’s communications have to move with the times, Lim explains, and the type of information disclosed has to be sensitive to the current concerns of the market.

In the midst of the fi nancial crisis, for instance, the company started disclosing more information about the balance sheet and debt management, because that was the number one screen used by investors. Two years ago that changed to providing more visibility about capital allocation levels so that investors could distinguish between what the company was reporting and what was being reported in the press. More recently, the company has been providing more detailed information about its residential operations in China, as the market focuses its concerns on the problems in the Chinese real estate sector.

With hindsight, Lim looks back at the global fi nancial crisis as a challenging and professionally rewarding experience – now that the company has safely come out of the other side. Another memorable time for him was the IPO of CapitaMalls Asia, CapitaLand’s shopping malls business, which he says was

colleagues. Harold [Woo] and i are just the focal point for iR activities. We stand on strong shoulders. Perhaps it also helps to be enthusiastic.

How are the CFo’s iR responsibilities distinct from those of the Ceo and the head of iR?The cFo sits at the crossroads of strategy, business, real estate markets, fi nancial results, capital markets and capital management, and investors. He or she is thus the one person in a company who has a unique perspective and can draw links, connections, insights and conclusions from the interplay of all these areas that may be relevant in the company’s discussions with investors.

Can a CFo talk to investors about strategy on an equal footing with the Ceo?only if the cEo provides the cFo with opportunities to be involved in strategy discussion and formulation. senior management meetings, board meetings, strategic reviews and discussions should all include the cFo. Having said that, investors would always prefer to hear the cEo and business heads if given a choice.

olivier Lim, ex-cFo of capitaLand

you won best iR by a CFo last year as well. What’s your secret?The biggest reason is the collective strong reputation of capitaLand and my


executed in record time despite being the largest IPO to take place in Singapore in the last 16 years.

CapitaLand’s focus for the next decade will be on strengthening its competitiveness in the new business areas and geographical locations in which it now operates, the troublesome yet expansive Chinese real estate sector being a prime example. The new CFO for this next phase is Arthur Lang, a former investment banker just like Lim, who worked at Morgan Stanley for 15 years.

Lim is full of praise for his successor’s abilities and know-how. He wasn’t asked to write a handover letter when he left the finance department behind at the end of the summer, but if he had, he says, it would have included the following snippets of sage advice.

‘Understand and be up to date with the real estate industry and the markets in which the group operates; be well versed in the strategy of the group, and have a view of the future and link it back to strategy. Investors are far more interested in market and business insights than past financial performance (although that is very important too, as the outcome of strategy and execution).

‘Investor relations is not about getting as many investors to invest as possible. It’s about getting the right shareholders to invest – that is, shareholders that are aligned with the strategic and business thinking and direction of the group. So, more candor, less hype.

‘Management lives with the business for the long term, whereas investors can sell or buy into the stock at any time. Don’t be too fretful of short selling or ‘sell’ calls. It’s all part of the market and cycles. In fact, short sellers are the only guaranteed future buyers of your stock. They will have to cover some time.’

Lim’s final bit of advice for his successor is a touch more tongue-in-cheek than the rest. ‘Remember that you have five bosses,’ he quips. ‘your CEO, the board, shareholders, regulators and your spouse!’

Best investor relations in sector – real estate

CapitaLand has two core markets: Singapore and China. The former is the traditional home for the property developer, while the latter is where the company’s growth story is happening at the moment. Each location

currently accounts for 35 percent of the company’s assets, but management and the board have endorsed a strategy for pushing the percentage of assets in China up to 45 percent.

CapitaLand

CapitaMall Trust

Keppel Land

Ascendas REIT

CapitaCommercial Trust

Fraser and Neave

Mapletree Investments

CapitaMalls Asia

City Developments

SP Setia, Malaysia32

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Best investor relations in sector – real estate (including property development)

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Singapore is ultimately limited by its size, whereas China has a seemingly expansive enough area and population to sustain long-term growth.

‘Real estate is really a play on demographics, stable government and high growth, and China offers all of that,’ says CapitaLand’s senior vice president of IR, Harold Woo. The much-talked-about administrative measures to cool the housing boom also receive positive endorsement from Woo. ‘It helps to cool speculative fervor when a government does things that try to build a sustainable real estate market through the years rather than have boom and bust,’ he adds.

It is exactly these ups and downs in the cyclical property sector, spun around further and quicker by the turmoil in the financial markets, that have created a few challenges for the IR team at CapitaLand over the last year. ‘For once our shares have underper-formed those of our peers,’ admits Woo. ‘But you really can’t fight the markets, because a lot of it is beyond your control. All you can do is make sure that people understand your strategy – so be clear about it, stick to it and be consistent in your message.’


Investor outreach has been stepped up –attendance at conferences in Singapore is increasing, and Woo is keen to further explore the possibilities of technology like video conferencing. The company has already conducted some video conferences, but only at a broker’s office. Woo is more cautious about social media, though – he has had a consultant come in to advise on the issue, but for now the IR team is watching to see how the trend develops.

Head of strategic corporate development Olivier Lim is in agreement with Woo about

the IR difficulties for property developers in the current business climate. Investors always want certainty, clarity and guidance as much as possible, but quarterly earnings in the real estate sector are lumpy, says the ex-CFO, making guidance a fool’s errand. The real test for the company’s IR, according to Lim, is how to communicate a consistent message to investors without sacrificing the flexibility for the company to grow and seize the opportunities that arise in dynamic environments like China.

To achieve this end, Lim – three-time winner of the best IR by a CFO award – works to a set of seven IR principles, listed below, which require management to give investors a deeper, closer and more honest appraisal of the company at all times, not just in the current climate.

seven PrIncIPLes oF Ir By olivier Lim, head of strategic corporate development and ex-cFo, capitaLand

1give strong and consistent guidance on strategic direction. in particular, what are the underlying trends that we are trying to tap into, and how we are tapping into those trends (sector and geographic focus)?

2

Avoid falling into the trap of giving quarterly financial guidance or feeling pressured to meet analysts’ short-term forecasts. Real estate development is excellent for value creation, but it is lumpy and can be volatile. it’s important to give the business breathing room to make the right decisions that maximize value, rather than being forced into a position where it has to time earnings. We must remember that investors have the flexibility to buy and sell shares at any time, but management has to live with the business for the long term.

3Create opportunities for investors to see our businesses up close. A picture may be worth a thousand words, but there is absolutely no better way to communicate real estate competency than seeing projects up close. Looking at the photos and plans of two different malls is very different from physically walking through them.

4Maintain regular contact with investors through conference calls, non-deal roadshows, conferences, emails and so on. Each year we invest a significant amount of time seeing investors, and this must occur consistently through both good times and bad. Avoid ‘fair weather’ iR.

5Bring business heads to see investors. Even the most credible cFos and iR heads can do only so much. investors appreciate having a chance to speak to the cEos of strategic business units or the working teams to get an up-to-date sense of the environment or markets.

6investors appreciate candor in discussions. They can tell easily when the messages and discussions are scripted. Generally, we have pretty comprehensive slide decks, but we hardly ever do a page flip through them. As soon as we start a meeting, we go straight into the Q&A rather than dive into the slides.

7investor meetings should be two-way discussions. We like to engage our investors and analysts to get their views. They usually see many companies and have many sources of info, so it can be valuable to hear their take on what is happening in the broader markets. such interactions usually bring new insights to both parties.


MethodologyEvery award and ranking in IR magazine’s Investor Perception Study, Asia 2011/2012 is based solely on a survey of more than 300 members of the investment community. The vast majority of respondents (94 percent) who took part in the survey are based in Asia.

In the first stage of the research, IR Insight sent an email to a contact list of portfolio managers, buy-side analysts and sell-side analysts in Asia, inviting them to take part in an electronic survey programed by market research firm Fox Insight. A total of 38 respondents in Asia completed the survey electronically. Mary Maude Research then interviewed a further 271 respondents by telephone (251 in Asia and 20 in the UK and North America). On average, interviews took 10-15 minutes.

Points and rankings

PoinTsEach respondent is asked to make three nominations per category: first, second and third. A first choice nomination earns six points, a second choice earns three and a third choice earns two. The total number of points is then calculated by multiplying by six the number of ‘firsts’, by three the number of ‘seconds’, and adding two points for each ‘third’. This points system is also used for most of IR magazine’s perception studies around the world.

RAnKinGsThe points allow us to rank all companies in the entire investor perception study. The company with the most points obtains the number one ranking; as firms’ points decrease, so do their rankings. This year the lowest number of points a ranked company can have is 20.

AWARdsThere are a total of 48 awards in this report (not including the individual pan-Asia awards for best CEO, best CFO and best IRO). Awards are given for each category asked about within the survey. The company or individual with the most points in each category wins the award.

The awards are separated into two regions: there are 30 awards in Greater China (covering mainland China, Hong Kong and Taiwan) and 18 awards in South East Asia (covering Singapore, Malaysia, Thailand, Indonesia and the Philippines).

In all award categories, survey respondents are asked to nominate separately for each region. For the country awards, respondents were asked to nominate

separately for each country they cover. The winners of the sector awards were determined by adding together each company’s points from all the other awards categories and ranking them within their sector (if applicable).

THE sEcToRs usEd in EAcH REGion ARE As FoLLoWs:

The grand prix for best overall investor relations in each region has separate short lists for both large cap and small or mid-cap companies. IR Insight used the following indices to determine which companies are classified as large cap:• FTSEChinaA50Index• TSECTaiwan50Index• HangSengIndex• StraitsTimesIndexIn the vast majority of cases, a company’s

country of origin is determined by the location of its headquarters (ie, a company headquartered in Beijing but listed in Hong Kong is deemed Chinese). Extra factors are taken into account only for mainland Chinese companies that are listed in Hong Kong and have headquarters there as well. The location of the company’s principal business operations and its reporting currency are also considered pertinent here.

AWArds By sector

Greater china

Banks & financial services

Consumer goods & services (including retail)

Industrials (including construction & conglomerates)

Real estate (including property development)

Technologies & telecoms

Transport (including logistics & infrastructure)

south east Asia

Banks & financial services

Industrials (including construction & conglomerates)

Real estate (including property development)

Technologies & telecoms

Transport (including logistics & infrastructure)


RespondentsRespondents by investment role Respondents by sector

TELEPHonE suRVEY

33%

48%

16%

3%

Buy-side analyst

Sell-side analyst

Portfolio manager

Other All or most sectors 99

Basic materials 7

consumer goods 22

consumer services (including retail) 15

Energy 8

Financials 37

Healthcare 7

industrials (including construction) 17

Real estate 36

Technologies (including telecoms) 50

utilities 6

Transport & shipping 13

small & mid-cap companies 7

Respondents by location

CHINA 138Anta Sports ProductsChina Shenhua EnergyAgile Property

TAIWAN 70Taiwan SemiconductorHTC CorpFubon Financial

COUNTRY

THAILAND 31Precious Shipping

MALAYSIA 38CIMB Group

SINGAPORE 98SingTelCapitaLandDBS Group

Respondents coveringaward-winningcompanies

309 respondents participated in the survey:103 were based in Hong Kong, 98 in Singapore, 44 in China, 33 in Taiwan and 31 in other regions.

Greater ChinaSouth East Asia

HONG KONG 145Cosco PacificHang Lung PropertiesLi & Fung

PHILIPPINES 27PLDT

INDONESIA 41Astra International

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