In light of the increasing familiarity with virtual interactions among investors and analysts, the question arises: do IR professionals still find in-person roadshows necessary, and is maintaining business travel budgets still deemed essential?
In a world dominated by advanced communication technologies, the enduring value of in-person meetings cannot be underestimated. The simple act of sitting face to face carries an intrinsic worth that transcends the limitations of computer screens. It is particularly crucial when considering the trust investors place in your company as a wise investment choice. Investors highly prize the opportunity to meet senior executives in person, granting them the unique ability to gather invaluable information and make close observations that virtual platforms cannot replicate.
Nevertheless, we must acknowledge the undeniable advantages of virtual meetings, such as cost efficiency and time savings. To maximize the impact of your in-person meetings, focus your efforts on your top 10 shareholders you have yet to meet face to face, in addition to key fund managers you want to build relationships with. The key lies in strategic planning. For instance, our investor target report is an indispensable tool for your preparations. It offers an extensive analysis of your company’s existing and historical shareholders, along with insights into the shareholder structures of your peers. This equips you with a profound understanding of the mutual fund market from various perspectives, encompassing fund inflows and outflows.
In conclusion, it is essential to leverage virtual meetings for investors in the same location or those with whom you have already established relationships. The key to an effective investor relations strategy lies in finding a harmonious balance between the advantages of in-person and virtual interactions.
One of the things that is important in planning post-results roadshows is deciding which investment banks to work with. We’ve seen many large-cap corporations that received numerous invitations from different brokers. Why is it necessary to engage a third party to coordinate roadshow logistics on behalf of the corporation?
Coordinating roadshow trips across multiple cities and time zones can be more complex than it seems, especially when working with different investment banks at once. That’s where a third-party vendor comes in. They can help you coordinate with different corporate access teams, making sure you use your time effectively to meet with important shareholders and investors.
For instance, one of our clients in Hong Kong does an annual post-results roadshow in the United States and Europe, covering multiple cities in both continents. With our assistance, they can centralize meeting schedules and trip arrangements, making the process smoother. We can also set up extra meetings to make the most of any free slots. At ICA, we aim to simplify these challenges for our clients, allowing them to focus on their most important goals.
Many people say that it takes a lot of work for small-cap companies to garner sufficient interest from sell-side analysts and institutional investors. Have you seen small-cap companies that have been successful in doing post-results roadshows that attracted a decent amount of demand? Or have you seen some struggling with getting enough attention from the capital markets?
In my experience, I’ve encountered two scenarios when working with small and mid-cap companies. One of our clients operates in the biotechnology sector with a market cap of around $300 million. Although this may seem below the radar for many investors, they’ve managed to secure meetings with top-tier global institutions. Their success lies in being part of an industry that often garners investors’ attention.
On the other hand, I’ve worked with a small-cap company in a niche market within a larger, more traditional industry. Here, they faced a different challenge. A well-established industry giant dominated the market and had already attracted the majority of investor interest. Despite having a similar market cap to the biotech client, they struggled to generate investor interest due to the lack of knowledge about the niche market and its growth potential.
To address this issue for our small and mid-cap clients, we’ve taken a proactive approach. Our research analyst team has prepared research reports, which we distribute through financial terminals. This ensures that our clients are categorized as companies with coverage when investors are screening for investment opportunities on these platforms.
One of the themes that we’ve been talking about at ICA Investor Relations is around investor engagement. We talk about helping clients to identify the right investors, handle outreach, and cultivate long-term relationships. How do we ensure that these efforts can successfully generate excitement about the company and its latest financial results? And what next? Do you have any words on the companies’ next steps after their roadshow meetings?
I consider patience a key factor in investor conversion. Investors look for a consistent track record from the management team, wanting to see that senior executives follow through on their commitments and translate words into tangible results. When a company maintains openness and transparency about its successes and challenges, it gradually earns the market’s confidence.
Furthermore, I believe it’s crucial to engage with analysts and investors in informal settings occasionally or reserve 5 to 10 minutes at the end of each investor meeting to gain insights into how the market perceives your company’s position, equity story, and performance relative to peers. Sometimes, we become so deeply involved in our own narrative that external input can help align our IR strategy with the market’s expectations. Alternatively, companies can consider hiring a vendor to conduct interviews with investors and analysts, collecting feedback after releasing their latest results.
This approach, which we have consistently employed for our clients in the past, provides valuable insights into market perceptions and helps refine strategies for the future.
