A successfully arranged NDR can foster effective communication between executives and investors by updating company performance and business milestones and communicating future development.
To achieve this goal, the IRO may consider the following factors when planning NDRs.
Timing.
NDRs are usually organized following annual/interim results or a significant business milestone announcement, which may be the discovery of a new oil field, a disruptive innovation or technology breakthrough, a license or permit for producing or selling a key product, or a major M&A, etc. The timing of the roadshow meetings can be the most productive when the company meets its investors right after major public announcements and when the company is part of the trending hot topic in the market.
Location.
Location decides investors. The company must select cities/regions that can expand its shareholder base. Suppose an Extraordinary Shareholder Meeting is approaching, and the proposals are subject to approvals by investors. In that case, the company should focus on the cities where existing shareholders are relatively concentrated and communicate with investors regarding the proposals the company wishes to be voted on.
Investment Bank Selection.
Several investment banks might be interested in arranging NDR meetings for your company. Companies should consider the prestigiousness of the banks as well as their client coverage in a specific market. Companies should also consider the latest research ratings from analysts of investment banks.
Equity Story.
Investors expect to hear about the latest developments during roadshows. We suggest IROs comb through the company’s recent business progress in advance and update its equity story. Besides the CFO/IRO, the company may invite the head of a specific business unit relevant to the story to join the meetings with investors.
Feedback Collection.
Roadshows provide opportunities for companies to collect investor feedback directly. Before wrapping up a meeting, companies are suggested to use the last five to ten minutes to ask investors about their perception of the company, the industry, or the regulatory environment. By asking for feedback from investors, it will help the company understand concerns from the investors’ perspective. Companies may then address these concerns accordingly and enhance the efficiency of their IR work.
