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CJ hones investor relations for growth

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Below is the excerpted article from the Korea Herald.

 

Foreign ownership of company's stock jumped to 41.3 percent in second quarter

CJ Corp., the nation's leading food-processing company, has been quickly attracting foreign investment over the past year and the company says this correlates to its focus on investor relations.

"Foreign investment has been rising at a phenomenal rate and many of the investors have been expanding to long-term investment," Mark Kim, head of CJ's investor relations team, told The Korea Herald. "One reason is that our company has been good at keeping its word and meeting its goals, which has allowed us to win the trust of investors and stakeholders."

Before CJ discovered the value of investor relations, the company had been struggling to turn the heads of investors. Now the company has buyers from as close as Hong Kong to as far away as London.

In 2000, the foreign stake made up a mere 14.9 percent, which inched up to 17.9 percent in 2001, 23.2 percent in 2002 and 31.4 percent in 2003. The figure reached 36.8 percent in the first quarter of 2004 and jumped to 41.3 percent by the second quarter. It now hovers around 45 percent. The share price in 2000 stood at 30,500 won and rose to 62,100 won by 2003.

"We attribute this upward trend to having kept our promises for the past four years, and our investors have been satisfied with our IR strategies," said Kim, pointing out that a key strategy is disseminating correct information in a fair way at the right time.

"IR is important to raising the value of the company and building trust," he stressed.

The company's target of net profit this year is 176 billion won from an operating profit of 242 billion won and revenue of 2.6 trillion won. Analysts' target prices for CJ shares range from 70,000 won to 90,000 won.

Kim said the growing foreign ownership of company stocks does not pose a threat to the company's balance of power, as most large investors have a 5 percent stake and those who have more must report their holdings. With the chairman owning 24 percent and employees 6 percent, the amount of foreign-owned stocks is not deep enough to offset the balance.

"We're not afraid of a foreign takeover at this time, and with a lot of our shareholders long-term investors, this is something the company needs right now," Kim said. He added that domestic investors have shied away because of the unstable economy but he believes the number will rise once the economy turns around.