VIETNAM NATIONAL UNIVERSITY, HANOI
SCHOOL OF BUSINESS
NGUYEN THANH CONG

DEVELOPING AND IMPROVING INVESTOR RELATIONS
THE CASE STUDY OF BAC VIET GROUP

Major: Business Administration
Code: 60 34 05

MASTER OF BUSINESS ADMINISTRATION THESIS Supervisors: Vu Huy Thong, PhD
Ha Nguyen, MBA

Hanoi - 2013
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TABLE OF CONTENTS
ACKNOWLEDGEMENT i
ABSTRACT ii
TÓM TẮT iv
TABLE OF CONTENTS vi
LIST OF TABLES ix
LIST OF FIGURES x
LIST OF ABBREVIATIONS xi
INTRODUCTION 1

CHAPTER 2: INVESTOR RELATIONS IN BAC VIET GROUP 30
2.1 An Overview of BacViet Steel 30
2.1.1 Bac Viet Group Structure 30
2.1.2 Charted capital increasing process 33
2.2 IR activities in BacViet Steel 36
2.2.1 Current status of BVG stock 36
2.2.2 Operation of IR team 39
2.2.3 IR activity in Bac Viet Steel 39
2.3 Evaluation of IR activities in BVG 42
2.3.1 Strengths 42
2.3.2 Weaknesses 43
2.4 Chapter review 44
CHAPTER 3: RECOMMENDATIONS TO INVESTOR RELATIONS
ACTIVITIES OF BAC VIET GROUP 46
3.1. Forming investor relations team 47
3.2 Identifying, attracting and retaining investors 48
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3.2.1 Identifying the current shareholder base 48
3.2.2 Shareholder identification methods 48
3.2.3 Identifying the appropriate shareholder base 49
3.3 Knowing market expectations and forming compelling messages 50
3.4 Developing financial calendar 51
3.5 Using investor relations tools 53
3.6 Improving investor loyalty and retention 65
3.7 Managing negative media communication 66
3.8 Chapter review 66
CONCLUSION 67
REFERENCES 68
REFERENCES 69


LIST OF ABBREVIATIONS

AGM
Annual general meeting
BOM
Board of management
BOD
Board of directors
CEO
Chief executive officer
CFO
Chief financial officer
BVG
The stock code of Bac Viet Steel in HNX
IRO
Investor relations officer
IR
Investor relations
IFRS
International financial reporting standards
HNX
Hanoi stock exchange
PBT
Profits before tax
PR
Public relations
SSC
State securities committee


methodology, the scope of the research and the significance of the research.
Chapter 1 researches the current theories of IR activities. In this section, the
definition, objectives, audiences of IR activities are clearly defined. There is
not a perfect model to organize an IR division for all companies. Based on
models of implementing an IR program, the selected model features are in the
following order: (1) identify the current shareholder and targeted shareholder
(2) attract and retain shareholders (3) understand market expectations and
form compelling messages (4) Develop the financial calendar (5) Select and
implement IR tools (6) Deal with crisis communication in Investor Relations.
Chapter 2 analyzes Bac Viet Steel‟s Investor Relation activities,
including the strengths and weaknesses. Acknowledgement of the leaders
about IR is one of the strength, but weaknesses of IR activities were
identified as (1) Bac Viet Steel hasn‟t applied any IR program model (2) BVG
does not have fulltime IR staff (3) some short backs with IR activities.
Based on above analyses, Chapter 3 presents the solutions and
recommendations for Bac Viet Steel to correct the weaknesses and to enhance
IR activities. This chapter also provides details of how to implement an IR
program in Bac Viet Steel, and improve investor loyalty and retention.
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INTRODUCTION
1. Necessity of the thesis
When being listed on the stock exchange market, the company must
comply with the laws and regulations of the stock exchange market as well as
overall legal framework. These regulations may vary from the disclosure of
information to production of particular financial statements. As a result of all
of these compulsory tasks and the active promotion activities of companies, a

 Give recommendations to Bac Viet Steel for the organization of its
IR division, implementation of its IR program and improving its IR
activities in general.
3. Research questions
To fulfill the objectives of the study, the following research questions
need to be answered:
 How to improve Bac Viet Steel‟s IR activities to support the
company‟s strategy?
 What is a suitable model to organize the IR division in Bac Viet
Steel?
 What is a suitable model to implement an IR program in Bac Viet
Steel?
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 What should be done to implement IR program in Bac Viet Steel to
make it more efficient and support the general strategy of Bac Viet
Steel in the future?
4. Scope of study
A joint stock company who wants to list on stock market has to meet
many strict requirements as well as fulfill many duties by the regulations. To
maximize its shareholders benefit and competitive advantages, it not only
meets the regulation but also makes higher effort by Investor Relation
activities. This study is conducted in the scope of Investor relations of listed
companies. It is planned to implement deep analysis on the case study of Bac
Viet Steel JSC which listed on Hanoi Stock Exchange.
5. Data Sources and Processing
This thesis uses both secondary and primary data sources. The
secondary data come from related studies on investor relations, studying
books, articles, online documents and so on. The secondary data also come
from reports, news-letters… from Bac Viet Steel. The primary data come

may have some impact on the findings and the quality of solutions.
9. Expected Results
The study will give a better understanding on the IR definition and its
elements as well as the program of IR activities. Moreover, recommendations
to Bac Viet Steel Investor Relations activities are at the chapter three of the
study.
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10. Short introduction
The thesis is composed of 3 parts:
Chapter 1: Literature review of IR activities
Chapter 2: The current situation of IR activities in Bac Viet steel
Chapter 3: Solutions to enhance IR activities in Bac Viet steel
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CHAPTER 1: LITERATURE REVIEWS OF INVESTOR RELATIONS
“Our view of the world is that investor relations strategy,
focused on long-term equity value, should be a force in all
corporate communications decisions.” Tom Ryan and Chad
Jacobs – Using investor relations to maximize equity
evaluation, John Wiley & Sons publishing house.
1.1 The concepts of investor relations
1.1.1 The definitions
Along with the history of the development of stock exchange market, IR
concepts is more and more developing, and more and more paid attentions by
companies and enterprises, especially those who are quoted. These days, IR is
going beyond its theoretical meanings. It is also an art in the modern business
and management. There are different definitions on investor relations and none
of them has a dominant acceptance among analysts and theorists. Two of them,
which are widely used as practical guides on investor relations, are:

1.1.2 The benefits of investor relations
According to these above definitions of investor relations, the
objectives of investor relations are not only about company explaining their
business to all kinds of investors but also about company listening to the
investors‟ feedback. The benefits of investor relations are clearly defined in
three aspects as following: access to capital, liquidity and fair valuation.
Access to capital
The first and foremost method to measure the importance of investor
relations of a company is the raised capital. The two-way communication
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between the company and their investment community shall lead to ways of
accessing capital. The more efficient and cost-effective access to capital is,
the more successful the investor relations is.
Liquidity
Besides access to capital, another purpose that listed companies like to
reach through investor relations is attracting liquidity from their investor
relations activities, or, in other words, increasing the frequency of financial
trading in investors‟ shares. Once the investment community understands the
company, and relying on the availability of their shares, through the investor
relations, sellers and buyers can be attracted with pools as well as trade at
greater frequency of their shares.
Fair valuation
Furthermore, one of the chief objectives of investor relations is fair
valuation of the company, which is expressed by share price. Proper
communication with investors shall assist company in informing their own
achievements and breakthroughs. It also assists company in the understanding
of market evaluation process and the status of share price in the market as
well as the status of the company in the market (comparing to other share
prices). Actually, a well-executed, carefully planned investor relations

and mutual funds. Their role in the economy is to act as highly specialized
investors on behalf of others. For instance, an ordinary person will have a
pension from his employer. The employer gives that person's pension
contributions to a fund. The fund will buy shares in a company, or some other
financial product. Funds are useful because they will hold a broad portfolio of
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investments in many companies. This spreads risk, so if one company fails, it
will be only a small part of the whole fund's investment.
Institutional investors will have a lot of influence in the management of
corporations because they will be entitled to exercise the voting rights in a
company. They can actively engage in corporate governance. Furthermore,
because institutional investors have the freedom to buy and sell shares, they
can play a large part in which companies stay solvent, and which go under.
Influencing the conduct of listed companies, and providing them with capital
are all part of the job of investment management.
1.1.3.2 Private investors
Normally, the most of investment shall come from institutional
investors with long-term view and complicated requirements. Instead, private
investors shall be engaged in shorter-term investment.
Private investors - wealthy individuals looking for a profitable return in a
viable business venture, also known as business angels or angel investors or
informal investors - will also offer networking opportunities and business
connections or sometimes take on a management role in their invested company.
“Private investors - wealthy individuals looking for a profitable return in a viable
business venture, also known as business angels or angel investors - will also offer
networking opportunities and business connections or sometimes take on a
management role in their invested company”. Nowadays, an increasing numbers
of private investors gather into angel networks (or angel groups, or sub-set of
private investors) to share information, research, and analysis; and also pool their

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publish their opinions and analyses on a company. “Typical areas covered in
analyst reports are as below:
- Description of a company and its activities
- Comparisons with peers and read-across implications of peer
activity
- Opinions and analysis on how the company and management are
performing
- Opinions and analysis on the wider macro influences affecting the
company
- Forecasts of financials including full income statement, cash flow
and balance sheet (or summaries thereof)
- Expectations (including a target share price)
- Valuation of the company using a variety of metrics (discounted
cash flow and peer-group multiples are the most common)
- A recommendation to the reader (buy, sell or hold)
- Forthcoming catalysts and expected news-flow that support the
recommendation.”
Source: Investor relations, a practical guide, London Stock Exchange (2010)
As much as the significance of the analysts‟ voices, there are many factors
affecting their opinions, such as: sector that company is in, company‟s market
capitalization, investment community, trading volumes and stock‟s liquidity.
1.1.3.4 Media
Warren Buffett has insisted: “It takes 20 years to build a reputation
and five minutes to ruin it”. This statement has mentioned the broad
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importance of media to reputation of any organization or company. For all
businesses and sectors as well as all types of organizations or companies,

master communicators. This can be a rewarding or a paying experience. In all
cases, the company should be in good preparation and understanding. Then
whether positive or negative news released, the company should always show
the openness and comfort on communicating with the media.
In general, dealing with all kinds of stakeholders is never an easy work.
An investor relations program shall help a company in detailing the
characteristics and significance of the three principle investor relations
audiences: investors (institutional and private), analysts and the media. Figure
1.2 shall show the model and process of investor relations in a company.
15 Figure 1.2: The model and process of investor relations
Source: Investor relations, a practical guide, London Stock Exchange (2010)
1.2 The investor relations team
In order to generate a proper investor relations program, it is vital to
form an investor relations team and assign responsibilities. In practice, an
investor relations team shall include both internal members of a company and
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external forces, they are: company management, financial PR firm, and
investor relations consultancies.
1.2.1 Company management
Company management is the most important internal force influencing
on an investor relations program of a company. Its decisions and actions shall
affect the success as well as the failure of an investor relations strategy.
Furthermore, all kinds of shareholders also pay a lot of attention on the
operation of a company management. Investors, especially institutional
investors are eager for meeting and keeping an open communication with
company management to understand what they are really invested in.