Vietnam Airlines’ IPO: Financial Communications in Action

As part of a move toward a more market-oriented economy, the Vietnamese government is in the process of privatizing a number of state-owned enterprises (SOEs). Last week, it was announced that Vietnam Airlines would move ahead with an initial public offering (IPO) of stock this September, perhaps the company with the highest international profile. As this move has been contemplated for years, expectations – and some level of anxiety – are high. The handling and success of this IPO carries huge implications, not just for the company, but the government’s privatization efforts as a whole.

First a caveat: we do not work with Vietnam Airlines and have no knowledge of the situation beyond what has been publicly reported in the media and elsewhere.

The IPO, which is a selling of stock to the public, illustrates the importance of and the need for specialized financial communications. What it comes down to is the company needs to sell its business model and strategy to a variety of stakeholders, including:

• Potential shareholders, be they individual investors or financial service companies such as banks and private equity funds, in Vietnam and abroad;
• Analysts, who will follow the company and provide commentary on their views of it as an investment;
• Employees, who may not understand what this process could mean to them.

Those are just a few of the audiences the company will have to consider as they develop their communications strategy. These stakeholders will likely have many questions about the offering and the company’s operations. A few examples include:

• Given that just 20-30 percent of the company will be sold to the public (with the government retaining the balance), will shareholders really have a say in the company?
• Does the government/company have any timeline for reducing state ownership?
• As an employee, will I be able to buy stock? And if I can, what does that mean?
• Will company management be provided stock options as part of their compensation?
• How will the company compete in what is becoming a crowded market? How does it plan to compete with low cost carrier VietJet Air, which has a very ambitious expansion under way?

The Company needs to be ready for greater transparency into its operations and finances, which may require new policies and procedures. It will also need to establish an investor relations program to handle investor and analyst inquiries.

A comprehensive financial communications strategy would address these and many more issues. It may seem straightforward, but such a plan has to be coordinated closely with the banks and lawyers handling the listing. How the company says things is just as important as what is said, as there are strict laws and regulations about what a company can say as it undertakes such a process.

Which Platform is “Best”?

There was an interesting post on Campaign Asia-Pacific this morning that posed the question, “LinkedIn company page vs. corporate web site: which is more important?” The author makes a number of valid points: that web sites are “graveyards for content”; they don’t lend themselves to mobile viewing; and, they don’t really engage visitors. As such, he thinks LinkedIn company pages are “more important.”

I’m not sure they are mutually exclusive, however; they serve different purposes and target different audiences. What’s the first thing one does when researching a company? Google. And the search results will bring up the company web site, the LinkedIn page and any other sites mentioning the company. One tends to click on the company web site first. While I agree with all of the reasons LinkedIn pages are a must for companies the author that LinkedIn pages are a must for companies listed by the author (ease of setting up, mobile compatibility, ease of sharing, and so on), corporate web sites also still have a role in the digital mix. First, they enable a company to communicate its personality more effectively, whether that’s via design/style or the freedom to post whatever content the company wishes. Dovetailing with that, the web site is the company’s asset, while a LinkedIn page belongs to the host. Its ease of use plus the fact that it is free also limits how much one can actually “personalize” it.

Mobile compatibility is certainly one key advantage of LinkedIn, but I wonder if that issue is not over-emphasized for some businesses. I know I’m old guard and still tend to research companies from a laptop, not my phone or iPad. There are indeed some businesses for which a mobile-compatible site is critical, such as restaurants or shops, or travel businesses targeting people on the move. But for a marketing or communications firm, I’m not so sure.

As the manager of such a firm, I struggle with the various platforms. On which should we focus our time and attention?

• Our web site is indeed basic and static (I wouldn’t call it a graveyard, but perhaps a nursing home; the information just sort of sits there, staring out the window, saying hello when an infrequent visitor stops by). It provides general information about the firm, and was put together on the fly because we’d had potential clients comment about the lack of a site.  To me that indicates that there is still great value to them.
• This blog is our way of communicating news, insights and other content in “real-time.” It’s easy to create and publish content as well as share it on other platforms such as LinkedIn or Facebook. And those two platforms reach different audiences.
• Twitter can also play an important role for some businesses – provided they know how to use it effectively (too many don’t). We don’t tweet at C2, at least not yet. We obviously have a hard time communicating in 140 characters or less.

For now, each of these platforms is a separate but equally important habitat in the digital ecosystem. And with the way media continues to fragment, there are sure to be new platforms that companies will need to learn and use in the years ahead.