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Chinese Company Investor Relations

 

J.P. Morgan’s Depositary Receipts Group commissioned Ipreo to conduct its annual survey of investors to understand their sentiment toward Chinese companies. In total, Ipreo obtained feedback from 40 institutions that invest in China. As of March 31, 2012, these firms managed a combined $950 billion in equity assets, $21 billion of which represented holdings in Chinese companies, or nearly 10% of all Chinese equities held by active investment managers outside of China. Of these firms, 71% are traditional investment advisers/mutual fund managers, while 29% are hedge funds.

 

Their conclusions were not surprising:  In response to ways to attract investors to a US-Listed company, the responses were:

increase transparency, demonstrate sound corporate governance practices, consistently communicate with investors, uphold credible accounting practices, and host frequent roadshows and investor meetings.  Investor Opinions of Investor Relations of US Listed China Companies

 

In other words, adhere to the same standards as domestic companies.  Here, though, the task for the IR professional needs to be a lot more nuanced than for a domestic company.  In my experience Chinese CEOs and CFOs are not particularly receptive to transparency or candid feedback.  I've been terminated for 'asking too many questions."  It is a learning experience on both sides. For more information, or if I can help your company, please contact me  stuart@orcastrategy.com