Acceptance speech from Vincent Tse, general manager, investor relations department, China Resources Beer (Holdings) Company
How would you characterise 2020 from an IR perspective?
The year of 2020 has been challenging yet inspiring for IR. The sudden emergence of COVID-19 in the first half of the year has changed the practice of IR dramatically.
The lack of regular investor conferences, and the lack of international business travel by company executives reduced the number of opportunities for engagement in IR events. However, we consider this as a chance to actually improve communication between company managements and investors. With reduced travel, we engaged with a range of investors more flexibly via virtual meetings, including those in far flung locations.
Moreover, due to the extreme volatility in economic, business and stock market conditions, investors sought increased transparency from corporates, which presents IR with some unique challenges. Nevertheless, we prioritize the outreach effort and stand in the investors’ shoes to gauge their needs and perspectives more so than usual, adhering to our high-standard IR management practices and sincere attitude.
What have been some of the unique challenges facing China’s consumer staples sector? How extensively has consumer behavior changed in light of the pandemic?
Due to the large-scale lockdown in China amid the coronavirus outbreak, the overall size of the beer market dropped significantly due to the closure of on premise POS especially in Q1 2020. However, any recurrence of COVID-19 infections in Northeast China and Beijing has been controlled quickly and effectively since March, and the market has therefore gradually recovered to normal levels.
We overcame the difficulties caused by the pandemic and contributed to prevention and epidemic control measures by enforcing remote office arrangement and, after obtaining approval from local governments and ensuring staff safety, facilitating the resumption of production in a carefully planned manner.
We have been looking for development and have launched a number of sales programs, paving the way for rapid growth once the market recovers from the pandemic. We continued to expand our product portfolio and launched the high-end beer product “Heineken® Silver” beer in the second quarter of 2020. The launch, together with our high-end beer products, “SNOW MARRSGREEN BEER” and “Löwen White Beer” launched last year, further supported our premiumization strategy, enhanced our brand image and helped us adapt to the changing taste and preference of our beer consumers.
How have you changed your IR programme in order to communicate better in this tricky year?
With the outbreak of the pandemic, we had to adapt to the new normal of virtual meetings. However, the pace of activity has not dropped as we attended around 230 conferences/meetings with more than 2,000 fund managers and analysts mainly through teleconferences and online channels, in order to remain in close contact with institutional investors, analysts and potential investors.
Has your IR website become a more important portal for the markets in 2020? What are some of the features that attract the best feedback from investors?
As face-to-face communication was suspended amid the pandemic, the easiest way for investors to learn about the company’s up-to-date financial information and strategies was on be the IR website.
While financial data and reporting is important, we also put a strong emphasis on providing context on the company’s strategy and clarity about our execution and vision. Our IR website provides both simplicity and vision, connecting with investors without antagonizing them, and serves both professionals and people with limited financial knowledge.
Have investors taken new angles/been asking questions about new topics this year? What have been the queries you have fielded most? (particularly ESG)
As the general beer market was affected severely by the COVID-19 outbreak in the first half of the year, investors looked for timely disclosure and appreciated more frequent updates from the company during a period of uncertainty. Beginning from the end of March, as the lockdown restrictions began to ease in China, investors asked to hear about our recovery plans.
Long-term investors are interested to find out how companies will adapt to the new normal. Questions on acceleration of digitalization, potential modification of business models and ESG risk management have come our way during the post-pandemic period.
Based on the ongoing communication with our investors, we understand clearly the ESG issues that they are concerned with. Following the disclosure requirements and key performance indicators of the ESG Reporting Guide, we identified the material issues and formulated the framework of disclosure and information to be disclosed after analyzing and prioritizing all ESG issues with full reference to best practices in the industry and domestic and international social responsibility standards.
What do you think are the attributes of a top investor relations officer?
As a competent investor relations officer, it’s important to maintain open and transparent dialogue with investors to ensure they understand business sensitivities to a range of economic and business-specific factors alongside earnings drivers.
Frequent dialogue can ensure that company management and investors are aware of knowledge gaps where further qualitative and quantitative disclosures may be considered.
When communicating with market participants, a competent investor relations officer should also incorporate the detail of mitigating actions that have been undertaken by, or available to, management to protect investors, employees or other environmental impacts in response to possible events.
In 2019, China Resources Beer won four IR Magazine awards. Why do you think the investment community appreciates the company’s communications, and what are you most proud of about it?
At CR Beer, we highly value investor relations management, and actively engage and communicate with shareholders and investors via diverse channels.
We continue to maintain quality corporate governance and a high level of transparency and ensure the capital market is informed about our latest developments and future plans in a timely manner.
We listen to and consider the valuable views and suggestions from our shareholders and investors with a view to further enhancing operating performance, creating more business development opportunities and securing a better return for shareholders.