Controlling Corporate Information for Effective Image Management

This was the second year Vietnam Report announced the Top 10 most prestigious listed companies. Vietnam Report selected and analysed large-cap companies and shortlisted the Top 10 using three criteria, namely financial health shown on financial statements (updated to the first half year of 2016) and comparability with its peers (accounting for 40 per cent of weighting points); corporate prestige on media gauged by Media Coding method, all articles on candidate companies from July 2015 to October 2016 are coded (accounting for 40 per cent of weighting points); and specialist judgment using Analyst Coding to gauge stock growth prospect and weight on VN-Index (20 per cent of weighting points).

 

The Top 10 prestigious listed companies in 2016 are good-performing companies with good image governance and positive media effects in 2015 - 2016. Following Vinamilk is FPT Corporation, Vingroup Joint Stock Company, Hoa Phat Group, Bao Viet Holdings, Mobile World Investment Corporation, PetroVietnam Gas Corporation, Ho Chi Minh City Infrastructure Investment Joint Stock Company, Binh Minh Plastics Joint Stock Company, and PetroVietnam Power Nhon Trach 2 Joint Stock Company.

 

Most of Top 10 companies are big listed companies, featured by industry-leading revenue and profit, higher than industry-average ROA and ROE, and stock growth in the past 3-6 months. Besides, they are very popular names on media.

 

Vietnam Report’s experiences in analysing and credit ratings showed that to control information flows in the media, a company must ensure at least a third of information made known by its spokesman (in addition to articles from media and specialists), particularly information on operational results and business plans, to avoid unfounded rumors that may negatively affect the sentiment and decisions of investors.

 

Stock investment in Vietnam is now typically “emotional” rather than “qualitative and quantitative”, meaning that securities transactions are affected by investor sentiment rather than official data. Some information, particularly on business results, project plans or transactions of major shareholders, will directly affect the investor sentiment and cause a herd sentiment and behaviour. If the information is negative, stock prices may fall. Conversely, good news may spiral up stock prices and the company will become more attractive to investors.

 

According to researches by Vietnam Report and its partners, to be liked in the media, a company must have a certain rate of positive information and negative information in combination. However, negative information should not appear too long on the media or become a good example of failure (at least 10 per cent is negative news) and replace it with positive one covering many aspects: business performances, products, social responsibility and business leadership (at least 20 per cent is positive news). Coding results showed that listed companies with high rates of positive information included BVH, VIC and FPT while PPC and HAG were affected by negative information, e.g. disappointing business performances, profit decline/ loss.

 

Besides, a variety of topics will help spread a company’s images. Recently, companies seem to have paid more attention to communication efficiency and their information covers more topics. According to Vietnam Report, FPT now has the most diverse information in the media, appearing in 19 out of 24 sections, including business strategy, customer relations/sales, business result, human resource, image/public relations, investment, management, position, research, policy, pricing, product, research and development, reporting, payroll, social responsibility /donation and stock. FPT is followed by VIC, VNM and GAS with 16-17 sections.

 

However, the amount of information on each of these topics is varied. For listed companies, stock topic is usually the most interested. According to Vietnam Report, VNM topped the score in the stock section; NT2 and VNM led product/customer relations section; Ministry of Culture, Sports and Tourism and VIC led innovation/creativity category; and VIC and FPT topped social relations.

 

Clearly, to build the prestige in the media, a company does not need too much information appearing on the media. Information must be sufficient and balanced. It should not run only PR news. With a good fund, personnel, timing and strategy, a company can absolutely build an active communication strategy and response plans to deal with any crisis that may occur on the media. Therefore, prestige must be protected and developed to become a valuable asset for businesses, especially listed ones.