In this edition of 60 seconds with, I caught up with Lili Huang, Head of Investor Relations at De La Rue. Lili and I spoke about her career to-date, the highlights, challenges and what she thinks the future of IR is
What was your background before moving into IR, and why did you make the transition?
I was in PR and marketing immediately before moving into IR. Prior to that, I spent eight years in operations in the retail business of the company I was working for. So I knew the business quite well. At the time, the company was building an IR function and I was suggested to join the newly established IR team. It was the combination of my knowledge of the business and my communication/marketing experience that made me an ideal candidate. Despite that I had no knowledge about IR and very little financial/accounting training, I decided to have a go. I thought it would be a challenge and an opportunity to learn something new, but nothing worse could happen if it didn’t work out. And here I am ten years later!
How has your role evolved?
Having worked in three different companies in different sectors, I’ve realised that there are a lot of things that we, as an IR, have to learn. The basic principles of IR do not change, but the focus does. Each company has its own unique challenges, be it investor activism, share price volatility, which should be addressed with a well thought through IR strategy. Sometimes, the solutions do not always lie within IR. In the various companies I’ve worked in, I’ve always been able to get involved in other areas such as corporate communication, CSR, strategy etc.. In my current role, I have been involved in business development in China for the last two years, supporting the team on the ground for key strategic pursuits. Given the knowledge and insight IR has about the business, I believe we should not limit ourselves in our roles. We could add more value by getting involved in other areas if possible.
What are the main challenges you are facing in your role?
We are in the middle of changing our finance systems, the programme has been running for nearly two years now. During which, we’ve also changed how we report the numbers because of a number of disposals took place. The biggest challenge I have is to be able to get like for like historic comparatives and accurate financial forecasts.
Have you seen any impact from MiFID II?
Definitely. Our analyst coverage has reduced and I’ve found it more difficult to get coverage. There has been a slight increase in direct calls from the buyside, but not as many as I had expected. I think most of the buyside just don’t bother to do the research themselves for smaller companies as they are less well known, therefore generally lack market information about them. We have taken on the third party research approach to increase investor outreach. We are also looking into expanding our IR programme in the US where MiFID II does not apply.
Are you seeing an increasing emphasis on ESG reporting from the investment community?
Not really. I think we have already reported many ESG matters.
What changes do you think we will see in the industry in the next 5-10 years?
More focus will be on ESG and investor activism will continue to rise. Investors will look for more engagement with corporates. All these, coupled with MiFID II, pressures on the in house IR function will continue to increase. With limited resource and time, in house IR will rely on third party service providers more, which will lead to a blooming IR service industry.