Gain investor approval

— Written on the occasion of the company’s first anniversary of going public

　　As of May 16 this year, the company’s shares have been listed on the SME Board of the Shenzhen Stock Exchange for one full year. The company has successfully completed its transformation into a high‑quality public enterprise and stepped onto the stage of the capital markets. While the capital markets have enabled us to raise RMB 390 million in funding, they have also enhanced our reputation and influence. However, the stringent regulations, cumbersome procedures, and the open‑and‑transparent operating model of the capital markets have, to some extent, become unavoidable challenges for the company. In the face of numerous investors, the general public, and oversight bodies, we must manage our relationships with them prudently yet proactively, strengthen investor relations management, and ensure that our efforts earn the trust and recognition of our investors.
　　As everyone knows, investors’ most direct and fundamental goal is to generate returns in the secondary market; accordingly, they seek to make informed investment decisions by accessing more comprehensive information about publicly listed companies. Retail investors can leverage various information channels to gather insights that help them determine whether their investment objective is to share in a company’s growth, or to buy or sell in the secondary market—deciding which approach best ensures stable, efficient returns. For institutional investors, such information enables them to assess how to allocate capital to a particular company, calibrating the size of their position to balance steady returns with minimized risk. In mature markets, they may even use substantial shareholdings to gain board seats or exert influence over management, thereby securing a voice or advisory role within the companies they invest in. Ultimately, all these actions are aimed at achieving satisfactory investment outcomes.
　　So, how can a publicly listed company—acting as the primary entity in investor relations management—realize its value? It may seem that such companies merely perform this task passively or reluctantly. In fact, this is not the case: as long as a company’s growth depends on investment capital, effective investor relations management will invariably yield benefits. Everyone knows that Japan’s Sony is renowned for its stylish, cutting-edge electronics—but that is only one component of its broader corporate strategy. Sony’s success has been multifaceted, and investor‑relations management has played a key role. Sony went public on the Tokyo Stock Exchange in 1958 and on the New York Stock Exchange in 1970. At the time, its U.S. fundraising objectives were clear: to source materials and manufacture locally, aligning financing with production on the ground. From the outset, Akio Morita made it a priority to meet and engage with investors, enhancing the company’s image and communicating its growth prospects. Shortly after its IPO, from 1974 to 1979, the oil crisis struck, prompting widespread investor anxiety and frenzied stock sell‑offs—Sony was no exception, with its share price plunging to around $5 per share. In response, Sony’s investor‑relations team promptly visited each major institutional investor, invited analysts to issue research reports, and worked to restore confidence, quickly achieving positive results. In 1984, due to strategic missteps, Sony’s Betamax format lost out to competitors’ VHS products, resulting in substantial market‑share losses and mounting criticism from investors. The annual shareholders’ meeting lasted 13 hours, during which then‑Chairman Ohga stood at the podium for the entire duration, fielding questions and addressing concerns. Simultaneously, the company candidly published newspaper articles detailing how it would confront the ensuing trust crisis following the loss of market share. By openly acknowledging its shortcomings, Sony earned investors’ understanding and turned the tide. Global circumstances are ever‑changing; as we all know, the September 11 attacks had a profound impact on the global economy, further exacerbating challenges in the consumer electronics sector—and Sony was no exception. Yet just three weeks after the attacks, Sony pragmatically and transparently slashed its full‑year revenue and earnings forecasts. Its responsible, forthright approach, coupled with timely communication, enabled investors to grasp the company’s difficulties and problems, earning their support. As a result, Sony’s stock price navigated that period of uncertainty with remarkable stability.
　　The examples above may lean more toward the realm of crisis management, but it is nonetheless clear that Sony has earned investors’ trust through effective investor relations. As a result, Sony has not only secured a steady stream of financial support, but has also been able to mitigate—or even defuse—temporary crises when the company faces adverse circumstances. This is the benefit that sound investor management brings to listed companies, delivering intangible gains and value.
　　In the context of China’s domestic realities, raising capital is typically the primary motivation behind most companies’ IPOs. Investor relations efforts are therefore geared toward effectively supporting this financing objective. Companies also undertake extensive preparatory work to attract as much investor attention as possible. Consequently, prior to each fundraising round, they launch focused marketing campaigns, engage directly with investors, and promote their shares. When these outreach initiatives prove successful, they often generate multiple times the intended oversubscription, ensuring the smooth execution of the financing plan—particularly in a market environment that has yet to achieve full commercialization. However, effective investor relations extend beyond mere initial and subsequent financings; the ongoing interaction between listed companies and their investors constitutes a comprehensive marketing endeavor. By presenting a candid and well-rounded picture of the company’s business philosophy, technological innovation, management practices, product impact, and corporate culture, such efforts enable investors to gain a thorough understanding and bolster their confidence in holding shares. At the same time, through media channels, intermediaries, and other platforms, companies enhance their public visibility, significantly elevating their brand recognition. From a managerial perspective, investor relations can help shape investor expectations—whether optimistic or cautious—through open communication, guiding them to adopt a rational, long-term view of the company’s growth prospects. This approach prevents excessive optimism in response to short-term earnings gains and avoids undue pessimism when facing temporary challenges.
　　Under the new financial market framework, investor relations have evolved from a passive, one-way information‑disclosure function into an active, market‑oriented strategic communication and marketing role. Investor relations management has shifted from a previously defensive, crisis‑driven approach to a model in which corporate management proactively seeks input and builds mutual trust with investors. By engaging in diligent, long‑term investor relations efforts, listed companies can not only bolster investor confidence in their shares and secure continued support, but also enhance their reputation and cultivate enduring trust among stakeholders—including creditors, customers, partners, and suppliers—thereby securing a powerful intangible asset: a strong corporate image.
　　Accordingly, implementing effective investor relations management and earning investors’ trust can deliver substantial overall benefits to a listed company, providing robust support for its operations, production, and business activities. This, in turn, enables the company to attract investors with stronger performance and maintain a favorable market image, thereby setting it on a virtuous cycle of sustainable growth.

Securities Affairs Representative: Zhai Jie