Given the limited demand for a small-cap company, we suggest boosting its stock visibility in the capital markets by the following approaches.
Increase the usage of supporting IR materials for investor communication.
Apart from the basic IR disclosure to fulfill the regulatory requirements; a small-cap company can consider using an additional set of supporting materials to engage in a more active level of investor communications:
- Press Release – helps the company to create public awareness of its recent events/progress. Echoing the company’s overall strategy, the IR team should regularly announce new developments, such as the delivery of a large customer order, expansion plans, etc., to ensure a steady flow of information and attract attention from investors.
- Monthly IR Newsletter – shares the company’s latest business development with investors on a monthly basis. A newsletter is an effective and efficient way of building long-term relationships with investors; it contains summaries of major announcements, press releases, the news reported by media outlets, and the company’s latest investor activities. An NDR invitation is also included in the newsletter so that investors interested in further communication with management can sign up easily.
- Factsheet – IR Factsheet is a short compilation of key information that describes a company and its operations, with advantages such as low production cost and can be easily updated regularly. IR team should construct the latest updates of the IR factsheet to make the company’s equity story easily understandable to investors.
- IR Website – Both individual and institutional investors rely on the company’s IR websites for information. A well-designed and maintained IR website can foster more robust bonds with investors and shareholders. The IR team should update the contents of the IR section of the website in a timely fashion to make it a practical tool for investors to access information throughout the year.
Increase the direct communication between management and the investors.
Keeping an open and regular communication channel with the markets is the bottom line for corporate disclosure. Many Hong Kong-listed companies rely on the interim and annual results briefings each year as the primary events where management can participate and interact with investors. However, more than this may be required, given the limited number of NDR meetings or conferences that a small-cap company attends. We suggest a small-cap company add on two quarterly business update calls with the investment community between the annual and interim results briefing. Having senior management on the calls would give the company more exposure to investors and keep investors updated on how the company is doing during the period.
Conduct sell-side analyst outreach.
The IR team can actively explore opportunities for initiating talks between the company and sell-side analysts to increase the chances of gaining additional coverage.
