Turbocharging an IPO
Situation: Planning an IPO on the New York Stock Exchange ("NYSE"), Beijing-based Autohome needed a strategic communications plan that would help it succeed following a challenging period for Chinese companies listed in the United States.
The last few years have been challenging for Chinese companies listed in the United States. Many have been severely impacted by the global economic crisis, financial accounting scandals at certain Chinese companies, and a host of short-seller attacks targeting difficult-to-understand and non-transparent Chinese businesses. However, in 2013 the market tide began to shift slowly, with a small number of strong and reputable Chinese businesses venturing back toward the U.S. capital market and executing initial public offerings (“IPOs”). Autohome was one of them.
Autohome is the leading online destination for auto-related information in China. Through its website, autohome.com.cn, the company provides comprehensive, independent and interactive content to automobile buyers and owners.
FTI Consulting was engaged by Autohome to assist with IPO-related communications and investor and media relations. Our Strategic Communications segment experts worked with the company and its banking and legal advisors to produce and execute a multi-stakeholder communications plan for the IPO.
"We were delighted to partner with FTI Consulting as we prepared for and executed one of Autohome’s most important milestones to date – becoming a public company. During a very intense period, the FTI Consulting team became a seamless extension of our internal team and we were able to collectively deliver outstanding results when we launched the IPO in December 2013. We look forward to working together closely to develop a sound and effective investor relations program so that we can continue our success following a very good start. We are always grateful for the FTI Consulting team’s support."
Nicholas Chong, Chief Financial Officer, Autohome Inc.
FTI Consulting's Role: Create a compelling narrative, attract top-tier investors, generate favorable media coverage, and build a solid foundation for a long-term investor and media relations program
FTI Consulting worked closely with Autohome’s management, finance and marketing teams, along with banking and legal advisors, to create an overarching communications plan. The plan began with executing an initial multi-stakeholder approach to announce the filing of the F-1 and then immediately moved to planning the fast-track IPO, which was due to occur in approximately five weeks.
A global FTI Consulting team involving members in Beijing, Hong Kong and New York worked together to maximize investor relations, corporate branding and profile-raising opportunities to support Autohome’s IPO. The overarching intent was to treat the IPO as an opportunity to showcase the strength of the business and executive leadership, distinguish Autohome from its already publicly-listed chief competitor in China, and set the stage for a strong long-term investor and media relations program.
FTI Consulting developed a comprehensive suite of bilingual communications materials (key messages document, press releases, Q&A, talking points, stakeholder letters, media statements, etc.) to convey Autohome’s value proposition, its investment thesis and the dynamics of its market (e.g., low level of auto ownership in China) that support its growth. The team also conducted disclosure and media training for senior management to ensure executives would be able to effectively communicate the strengths of their business and competitive advantages without breaching regulations. Lastly, the team created an aggressive international media relations plan with both international and Chinese media to maximize outreach allowed on IPO day and drive coverage that would provide a solid foundation for future visibility initiatives.
Outcome: A record-breaking stock price increase, strong media coverage and significant investment community support
This plan proved a great success as Autohome’s stock rose 75 percent on the first day of trading, compared with an average increase of approximately 50 percent for other Chinese IPOs in 2013. The stock price has continued to make significant gains above its IPO-day level, nearly tripling in value since launch.
Further, as a result of a robust global media relations plan, extensive and high-quality media coverage was garnered in both international and Chinese media, helping set the stage for a longterm visibility building program. Print and broadcast coverage was secured with top outlets such as CNBC, CNNMoney, Investor’s Business Daily, Bloomberg Buisinessweek, The Wall Street Journal, China Business News (第一财经日报), National Business Daily (每日经济新闻), Oriental Daily (东方日报) and Beijing News (新京报), among others.
Lastly, significant investment community interest and support was secured. Several top global investment banks have initiated coverage of Autohome since its IPO, which is critical for attracting investor interest and promoting liquidity in its shares. Analyst coverage today includes representatives from the top financial institutions, including Citigroup, Deutsche Bank, Goldman Sachs, Oppenheimer and Piper Jaffray.