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Investor marketing strategy for improved market evaluation

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Issue recognition

It is no secret that business strategy and capital policy are important matters in corporate management, regardless of stock exchange listing status, to achieve continuous business growth. To raise funds for acquisitions or strategic investments, to protect against a hostile takeover, or as a means of rewarding executives, the importance of gaining recognition is clear in light of the recent rise in shareholder activism. However, not many companies receive praise from capital markets for their efforts to attract non-business stakeholders and encourage them to invest in their companies.

Listed companies face various requests from capital market to increase governance transparency, or to enhance information disclosure, as well as strengthening shareholder returns and social contributions. Furthermore, active promotion and dialogue with investors are required in order to obtain the "reasonable evaluation" that companies desire. Witnessing many companies are traded below book value and investments are concentrated in limited number of companies, many of "investor appeal" have failed to achieve satisfaction.

​Need of Investor marketing strategy

Recognizing capital market influence over corporate valuation, companies can take on the active role for improving or enhancing understanding of themselves with better understanding the capital market perspective and participant attributes, similar to a marketing of products and services in business the company is engaging. 

However, the number of competing companies in the capital market is far greater than in the business market, and because investors' preferences are skewed, there are some winners and many losers. In order to cope with the competitive environment, companies need to take a strategic approach by clarifying their position and specifically targeting the investors they want to appeal to.

Many of these investor marketing activities are currently called investor relations, or its English abbreviation, IR activities, and are often handled in parallel with public relations (PR in English) within companies. . However, in capital markets, corporate valuation is done by experts represented by institutional investors and through the price-setting mechanism of the trading market. However, it is also believed that superficial “appeal” is not valid and “collective intelligence” can see through the essence of growth driver and investment value. This implies typical "window dressing", such as presenting unrealistic growth plans, reforms that have little chance of realization, improved evaluation through increased awareness, and dividends that are difficult to maintain, have no more than a temporary effect.

On the other hand, this also suggests that reflecting investors' evaluations and opinions in management can lead to improved market evaluations. Companies that wish to obtain capital market evaluation must become capable of carefully examine the capital markets evaluation, reflect them in management, and able to distinguish investors worth listening to their opinion. Realization of  ``two-way dialogue rather than information dissemination,'' ``involvement and collaboration across the company rather than being limited to individual departments,'' and ``collecting management suggestions and promoting strategies rather than being in charge of document creation and external relations.'' are the challenge for them.

Our suggestion

With awareness of those issues, we are entrusted with the planning of investor marketing strategies and support for implementing measures.

New investors acquisition should be planned based on current status analysis, followed by defining investor targeting, reconfiguring your growth story, and planning and implementing investor marketing. Proactively reviewing and making improvements through continuous evaluation, we will strengthen the appeal to investors, and basis for evaluation to the company. 

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