The Chinese office of Kirchhoff Consult was set up in Suzhou, a city close to Shanghai renowned for its classical gardens, a decade after the Germany-based IR, communications and IPO advisory company first opened its doors in Hamburg in 1997. Today, Kirchhoff advises 90 per cent of the Chinese companies listing in Germany. Klaus Kirchhoff, founder of the consultancy, recently came to Shanghai to be a panelist at the fourth annual Deutsche Börse China-Europe Equity Forum.
In front of a conference room full of Chinese small and mid-sized companies interested in going public on the Frankfurt Stock Exchange, Kirchhoff began his address on IR and IPOs with his favourite Chinese proverb: a man without a smiling face should not open up a shop. The following day, IR magazine caught up with Kirchoff to get his views on eastern companies going West and the situation closer to home.
At what stage in the IPO process do you normally get involved with these Chinese companies?
In most cases, we are invited when the bank is already on board and the process has started, just before the kick-off meeting with the lawyers, accountants, and so on. In some cases, we work not only in the communications field but also as IPO adviser, so we are on board much earlier than the others. We help the companies prepare for the IPO process, then we organise a beauty parade for all the advisers.
How do you prepare them for investor relations?
First we do an IPO workshop where we try to show them what it means to go public, with respect to the culture, the philosophy of the company and the structure of corporate governance. Then we cover all of the obligations regarding transparency and reporting in a one-day workshop for management members. At the end of it, they know everything about this process and the life of a listed company.
I am also involved personally with coaching the management: we prepare the presentation for roadshows and for investor meetings, and then I do some camera-based training with the managers – which is not easy with the Chinese, because I really have to start from the beginning. I say: put your feet flat on the floor, sit in an upright position, don’t slouch or look disinterested.
Then we spend a lot time with Q&A training, because you can hold a fantastic presentation but if you are not very good in the Q&A session, you will lose out.
Do Chinese managements have the same reservations as their European equivalents, or are there any China-specific hurdles you have to overcome?
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