1 Santander Latin America Research Handbook April 2014
2 Latin America Research Jesus Gomez Head of LatAm Research & Equity Strategy LATIN AMERICA RESEARCH TEAN Agribusiness Christian Audi Gustavo Allevato Capital Goods Daniel Gewehr João Noronha, CFA Luis Miranda, CFA Mauricio Serna Cement & Construction Toe Matsumura / Fabiola Gama Andres Soto Jose Antonio Parra Renan Manda Rodrigo Ordoñez Walter Chiarvesio Education Bruno Giardino, CFA Daniel Gewehr Electric & Other Utilities Maria Carolina Carneiro João Saad Nicolas Schild Thiago Silva Walter Chiarvesio Financial Banks Financial Non Banks Boris Molina Henrique Navarro Nicholas Schild Renata Cabral Food & Beverage Luis Miranda, CFA Andres Soto Bruno Taveira João Mamede Mauricio Serna Ronaldo Kasinsky Healthcare Daniel Gewehr Bruno Giardino, CFA Francisco Echeverria Reinaldo Santana Metals & Mining Felipe Reis Alex Sciacio, CFA Rodrigo Ordoñez Walter Chiarvesio Oil, Gas & Petrochemicals Christian Audi Gustavo Allevato Walter Chiarvesio Pulp & Forest Products Alex Sciacio, CFA Felipe Reis Rodrigo Ordoñez Real Estate Fabiola Gama / Toe Matsumura Renan Manda Jose Antonio Parra Retailing João Mamede Reinaldo Santana Andres Soto Bruno Taveira Mauricio Serna Ronaldo Kasinsky Telecom, Media & Technology Valder Nogueira Bruno Mendonça Francisco Errandonea Rodrigo Ordoñez Walter Chiarvesio Transportation Pedro Balcão Ana Reynal, CFA Bruno Amorim, CFA Quant Renata Cabral Stefano Rizzi Strategy LatAm Equity Strategy Jesus Gomez Stefano Rizzi Argentina Walter Chiarvesio Brazil Daniel Gewehr João Noronha, CFA Chile Francisco Errandonea Mexico Hector Chavez Arturo Espinosa North Andean Countries Andres Soto
3 Latin America Research Valder Nogueira Head of Brazil Research BRAZIL RESEARCH TEAM Agribusiness Christian Audi Gustavo Allevato Capital Goods Daniel Gewehr João Noronha, CFA Chemicals & Oil Consumer Goods João Mamede Bruno Taveira Luis Miranda Ronaldo Kasinsky Education Bruno Giardino, CFA Daniel Gewehr Electric & Other Utilities Financial Banks Financial Non Banks Henrique Navarro Boris Molina Renata Cabral Healthcare Daniel Gewehr Bruno Giardino, CFA Metals & Mining Pulp & Forest Products Alex Sciacio, CFA Felipe Reis Real Estate Fabiola Gama Renan Manda Technology, Media & Telecom Transportation Pedro Balcão Bruno Amorim, CFA Strategy Daniel Gewehr João Noronha, CFA Jesus Gomez Christian Audi Maria Carolina Carneiro Felipe Reis Valder Nogueira Gustavo Allevato João Saad Thiago Silva Alex Sciacio, CFA Bruno Mendonça
4 Latin America Research Christian Audi (Sector Head) AGRIBUSINESS New York, USA (+1) Coverage: Cosan Cosan Limited São Martinho Gustavo Allevato, Brazil (+55) Preference of Ultrapar over Cosan. Throughout 2013, we reiterated our preference for Ultrapar vs. Cosan based on the fuel distribution segment in Brazil the most attractive in the world, in our view representing a much more significant part of Ultrapar s EBITDA (close to 70%) vs. only around 30% for Cosan. Ultrapar outperformed Cosan by close to 30% during the year. Preference of São Martinho over Cosan. With an eye focused solely on the sugar and ethanol businesses, we also reiterated our preference for São Martinho vs. Cosan, driven by SMO s stronger FCF generation as well as likely higher dividend going into SMO has outperformed Cosan by almost 10% since our post- Cancun conference report. : Differentiated corporate access included a well-timed roadshow with Cosan s CFO right before the company s Cosan Day events, which included, among other news, the information that the collapse of Cosan s two shares into one would not happen in 2013.
5 Latin American Equities Daniel Gewehr (Sector Head) CAPITAL GOODS Sao Paulo, Brazil (+55) João Noronha CFA, Brazil (+55) Luis Miranda CFA, Mexico (+52) Mauricio Serna, Mexico (+52) Coverage: Alfa Autometal Grupo Carso Iochpe Maxion Mahle Metal Leve Marcopolo Mexichem Randon Romi Weg Active portfolio rotation, with strong results. We initiated coverage of Mahle Metal Leve on July 18, 2013, with the stock gaining 21% in four months. The team downgraded Marcopolo in January 2013 at R$6.70. After a correction of 28%, we upgraded to Buy on January Industry benchmark reports. Daniel Gewehr has been covering Capital Goods since 2001, on both the buy and sell-side, and has a deep understanding of the industrial chain, as can be seen in his thematic reports like Weathering the South Storm Does Expected BRL Devaluation Offsets Weaker Sales to Argentina? (February 11, 2014). The team recently created a one-stop-shop chart book for the sector, which offers a 360 º view of listed companies and its peers. : The best corporate access on the Street, including benchmark event Santander Capital Goods Trip. Daniel and his team have close access to management, hosting Non-Deal Road Shows/Events (and writing reports about them) with all Capital Goods companies under Santander s coverage during 2013, namely Autometal, Iochpe, Marcopolo, Mahle, Randon, Romi, and Weg. In 2013, Daniel also conducted the Second Santander Capital Goods Trip, an opportunity to meet 21 companies/sources meetings in five days, including eight site visits.
6 Latin American Equities Toe Matsumura / Fabiola Gama CEMENT & CONSTRUCTION Mexico City, Mexico (+52) São Paulo, Brazil (+55) Andres Soto, USA (+1) Renan Manda, Brazil (+55) Rodrigo Ordoñez, Chile (+56) Walter Chiarvesio, Argentina (+54) Coverage: Ara Cementos Argos Cementos Pacasmayo Cemex Cemex LatAm Holdings Cresud Ferreycorp GEO Homex ICA IRSA Parque Arauco Urbi Out-of-consensus call on MRV. Taking a contrary view from the market, which did not believe in MRV s turnaround, we reiterated our positive view on MRV in June 2013, stating that the worst was behind MRV and that the company was approaching the margin inflection point. We called investors attention to the company s solid cash flow generation and excessively discounted valuation. In four months time, the stock climbed over 50% versus 13% for the Ibovespa, and as of this date, the stock is trading 17% higher versus -5% for the Ibovespa since June Cemex Latam Holdings: We initiated coverage of Cemex Latin Holdings with a Buy rating in April We argued that CLH deserved a valuation premium to Cementos Argos at a time when the market had an opposite view. Three months after that, CLH had outperformed CEMARGOS by 11%. Sector piece on Colombian cement companies. In October 2013, we introduced our YE2014 target prices for CLH and CEMARGOS and named those stocks our top picks in Colombia. CLH s stock has rallied 11% since then. : Timely corporate access/events. Among the events we hosted in 2013 we highlight: (i) Lunch meeting with PDG s CEO, Mr. Carlos Piani. The event took place during a critical period in the company s restructuring process, providing timely information on PDG s turnaround and short-term outlook; (ii) Road show with MRV s IR Director, Ms. Monica Simão: hosted in September, when MRVE3 began to outperform the market due to improved results, the road show clarified skeptical investors inquiries about the company s earnings recovery and intended pace of growth; and (iii) Road show with CEF (Caixa Economica Federal): following a period of much noise concerning the discontinuation of the French amortization system in mortgage origination, we were on the road with CEF to separate untruths from facts as well as to provide an update on the development of MCMV program..
7 Latin American Equities Bruno Giardino, CFA (Sector Head) EDUCATION Sao Paulo, Brazil (+55) Daniel Gewehr, Brazil (+55) Coverage: Anhanguera Estácio Kroton Ser Educacional Reiterating preference for the outperformer Kroton. Bruno maintained Kroton as his top pick during the whole year, and the stock outperformed its peers for the second year in a row, appreciating 73% even when Anhanguera s discount to the merger s share swap ratio started to widen. Bruno s call was based on Kroton s best-in-class fundamentals and on a risk-return perspective. Favoring SER and Estacio. Santander was a joint bookrunner of SER s IPO, which rose 34% in two months. Bruno worked in the IPO and initiated coverage in December. He has also favored Estacio for most of the year, and the stock appreciated 47% in Amongst the most significant sector pieces published over the last few months, we would highlight (i)the Quality Watchman series, an in-depth analysis of MEC s quality assessments; and (ii) coverage of main industry events: Private Education Congress and ABED s Distance-Learning International Conference. : 5th Santander Education Conference established itself as an insightful event, based on presentations by nonlisted companies and industry experts, in addition to all listed higher education companies. The team also organized events with reputable industry sources.
8 Latin American Equities Maria Carolina Carneiro ELECTRIC & OTHER UTILITIES Sao Paulo, Brazil (+55) João Saad, Brazil (+55) Nicholas Schild, Chile (+56) Thiago Silva, Brazil (+55) Walter Chiarvesio, Argentina (+54) Coverage: AES Gener AES Tiete Aguas Andinas Alupar Cemig Cesp Colbun Comgas Copasa Copel CPFL Energia E-CL Eletrobras Eletropaulo Endesa Chile Energias do Brasil Enersis Eneva Equatorial IAM Light Renova Energia Sabesp Taesa Tractebel Transmissao Paulisa Negative view on Copel: Curbing market expectations on apparently low multiples. In September 2013 we released a report on integrated companies in which we highlighted our view that Copel s adjusted multiples should account for lower implied return, worse operating and regulatory performance, and less growth sustainability in the longer term. Positive calls on Taesa and Alupar. In Santander s LatAm Universe Book, published in early January, we highlighted the attractiveness of the two cases before the start of rationing discussions, based on solid cash flow generation, higher than average operating parameters, and good IRRs. In our 4Q13 preview, with the two stocks overdiscounted, we reiterated the calls, and in both reports we have published on the hydro situation (early February and end of February), we highlighted our preference toward TransCos, even in our nonrationing cases. The team published a number of insightful thematic reports, among them Brazil Economics/Utilities/Strategy: Crying in (No) Rain Talking about Rationing Again; February 2014, Brazil Utilities: Fifth Brazilian Utilities Day: Help on the Way but Uncertainties Remain, March Corporate Events: VII EuroLatAm Infrastructure & Utilities Conference in NY Top Management from Cemig, Sabesp, TAESA, and Alupar October 2013 Cancun CEO Latam Conference Top Management from Endesa, Enersis, Colbun, Cemig, TAESA, and Alupar. Fifth Brazilian Utilities Day Top Management from Tractebel, CPFL, and AES; CCEE board member and Aneel representative March 2014
9 Latin American Equities Boris Molina (Sector Head) FINANCIALS BANKS New York, USA (+1) Henrique Navarro, Brazil (+55) Renata Cabral, Brazil (+55) Coverage: Banco de Chile Banco do Brasil Banco Macro Banco Pine Banorte Banregio BBVA Frances BCI Bradesco Corpbanca Credicorp Davivienda Gentera GF Galicia GF Inbursa Grupo Aval Intercorp Itaú Unibanco Itaúsa Nicholas Schild, Chile (+56) Remarkable report The End of the Repression: After recommending caution with respect to Brazilian banks for close to three years, Boris Molina and Henrique Navarro published a report in October 2013 foreseeing a tapering of the policy of strong public sector loan growth, predicting a recovery in ROEs and market share at private banks, offering a more positive view on the sector, and naming Itaú Unibanco as their top pick in Brazilian banks. The latest data from the Brazilian Central Banks indicates that their thesis was spot-on, with a recovery in spreads and a slowdown in public bank loan growth, as anticipated in the report. Remarkable calls of the year: Boris was persistent in his call of a Buy rating on Davivienda in Colombia in 2013, correctly anticipating that Bancolombia would underperform due to the need to increase capital to bolster capital ratios as the closing of the acquisition in Panama. His upgrade of Bancolombia to Buy in early 2014, ahead of the capital increase, also proved to be the right call, as the stock rallied ahead of the deal. In a similar way, Boris was ahead of the market with Banorte, with a Buy rating on Banorte before its capital increase in mid-2013, again anticipating a that the stock has overly discounted the share overhang. Likewise, in Mexico, his timely upgrade of Compartamos (Gentera) as a likely winner in the new regulatory environment in Mexico also paid off handsomely, while he correctly recommended that investors to stay way from Bolsa for the duration of the year on the weak cost outlook and regulatory uncertainties.
10 Latin American Equities Boris Molina (Sector Head) FINANCIALS NON BANKS New York, USA (+1) Henrique Navarro, Brazil (+55) Nicholas Schild, Chile (+56) Renata Cabral, Brazil (+55) Coverage: AFP Habitat BB Seguridade BM&F Bovespa Bolsa Mexicana de Valores Brasil Insurance CETIP Cielo Grupo Sura Multiplus Porto Seguro Smiles Sul America Valid Top Insurance Coverage - Timely Recommendation on Brazilian Insurance Companies. Henrique is ranked in the top positions in accuracy and timing of his recommendations on insurance companies, according to Bloomberg analyst rank. He covers all four listed insurance Brazilian companies namely: BB Seguridade, Porto Seguro, SulAmerica and Brasil Insurance. His timely reports provides an in depth update and is precise in anticipate the insurance seasonal characteristics soft and hard cycle incorporating an extensive cross-check of views with possible impacts of industry leading indicators as: unemployment level vs. insurance penetration and anticipated analysis of Brazilian rainy season vs. auto insurance market, which position his research apart from mainstream.. Out of Consensus calls Cielo and BM&F Bovespa. Henrique started 2014 with out of consensus call on Cielo, being the single analyst with underperformance recommendation, anticipating the competitive environment for the acquiring industry for He also maintained an out of consensus view on BM&F Bovespa after close two years, maintaining the proved negative view on traded volumes. He changed his recommendation to hold on October 2013, with a more constructive view driven by the priced in impact on competition and attractive company s dividend yield. : Strong Events and Road Show: Henrique and team have also close access to financial institutions management, hosting several events in 2013 as: Mortgage Morning with top management from the largest Brazilian banks, Insurance Day with all of the Directors from Brazilian insurance companies present, Loyalty Day with listed and non-listed company s top management. Henrique also hosted the first event with investors with ATS Brasil in March
11 Latin American Equities Luis Miranda, CFA (Sector Head) FOOD & BEVERAGE Mexico City, Mexico (+52) Andres Soto, USA (+1) Bruno Taveira, Brazil (+55) João Mamede, Brazil (+55) Mauricio Serna, Mexico (+52) Ronaldo Kasinsky (+55) Coverage: AmBev Andina Arca Continental Brasil Foods CCU Coca-Cola Femsa Concha y Toro FEMSA Gruma Grupo Bimbo Grupo Herdez Grupo Modelo Grupo Nutresa JBS Marfrig Minerva Pesquera Exalmar We have maintained a strong conviction call for Gruma. The company was the best-performing stock in the sector in the last two years. We identified the turnaround and deleveraging process of the company. For Ambev, we maintained a good flow of information on the corporate restructure process. Also, we maintained a cautious view on the stock due to valuation and identified a good entry point in late 2013, as volumes bottomed out at the end of the year. What s more, our team fostered communication with nonpublic companies (Schin/Kirin). We remain bearish on the bottlers in Mexico. The main reasons were (1) the expensive valuation levels and (2) expectation of more normalized growth. The environment was further complicated by new excise taxes in Mexico.
12 Latin American Equities Daniel Gewehr (Sector Head) Sao Paulo, Brazil (+55) HEALTHCARE Bruno Giardino CFA, Brazil (+55) Francisco Echeverria, Chile (+56) Coverage: DASA Fleury OdontoPrev Qualicorp Cruz Blanca Salud Inversiones La Construcción Genomma Lab Reinaldo Santana, Mexico (+52) Industry benchmark Healthy Actions Required report. Daniel, who has experience as a buy-side analyst, produced unique industry reports such as Brazilian Healthcare: Healthy Actions Required-Takeaways from Our 7th Annual Trip, where he provided an in-depth update of his coverage and healthcare subsegments. His research incorporates an extensive cross-check of views on the healthcare sector, including nonlisted entities in the industry such as regulators, hospital providers, brokers, health consultants, and reinsurers, which position his research apart from mainstream. Active healthcare portfolio rotation, with strong results. Daniel has been very timely in the case of OdontoPrev, upgrading the stock to buy on June 24, After the stock outperformed by 13%, Daniel downgraded it on January 9, 2014 (ODPV has corrected 12% since then). In October 2013, he changed his top pick to Qualicorp from OdontoPrev. Benchmark event: Healthcare Trip (already in its 7 th edition). Daniel and team have close access to management, hosting Non-Deal Road Shows with all the healthcare companies under coverage during Daniel also conducted the 7th Healthcare Trip with all listed companies. Coverage beyond Brazil. Besides the coverage in Brazil, Daniel sponsors the coverage of Genomma in Mexico and ILC and Cruz Blanca Salud in Chile.
13 Latin American Equities Felipe Reis, Sector Head METALS & MINING Sao Paulo, Brazil (+55) Anticipating structural changes and turnarounds was a turnaround year for the sector, with stocks going up significantly during the second half of the year after a long period of underperfomance. We were able to identify the trend and upgrade the sector in the middle of the year, enjoying most of the outperformance. Alerting investors on Vale. In a sequence of roadshows during the year it become clear to us that the main factor driving Vale's shares was the top-down view rather than bottom up. With that, in spite of the company's good fundamentals and management achievements, we were able to alert investors about our skepticism on the stock given the negative expectations about iron ore prices and China. : Alex Sciacio CFA, Brazil (+55) Rodrigo Ordoñez, Chile (+56) During the year we organized some meetings with company CFOs, including those of Gerdau, Usiminas, and Magnesita. Walter Chiarvesio, Argentina (+54) Coverage: Buenaventura CAP CSN Gerdau Grupo Mexico Magnesita Siderar Southern Copper SQM Ternium Usiminas Vale Volcan
14 Latin American Equities Christian Audi (Sector Head) OIL, GAS & PETROCHEMICALS New York, USA (+1) Early bird on IEnova in Mexico: Initiated coverage in mid-2013 with a strong-conviction Buy rating and the highest target price in the Street based on its strong fundamentals, defensive growth, and attractive non-energy-reform related opportunities. The stock has outperformed the Mexican Bolsa by 40% since our initiation report entitled The Right Stock, at the Right Time. Ultrapar as Top Pick in Brazil: Reiterated the stock as our top pick in April 2013 based on the differentiated event with Ultrapar s CEO (first meeting ever with investors in Rio); the stock has outperformed the Brazilian Bovespa by 17% since our report. Braskem in Brazil: Upgraded the stock to Buy in April 2013 based on strong international spreads, a weakening BRL, and solid volumes; the stock has outperformed the Brazilian Bovespa by 16% since our upgrade. : Gustavo Allevato, Brazil (+55) Walter Chiarvesio, Argentina (+54) Coverage: Braskem Ecopetrol HRT IEnova Lupatech OGX Pacific Rubiales Petrobras Queiroz Galvão E&P Tenaris Ultrapar Varied corporate access, including road shows in different geographic areas with CEO of Petrobras, CEO of Ultrapar, CEO of Queiroz Galvao, CEO of Sete Brasil, CFO of Allesat, as well as events with key industry associations: first meeting of President of Sindicom with investors in 2014; President of Abiplast, among others.
15 Latin American Equities Alex Sciacio, CFA (Sector Head) PULP & FOREST PRODUCTS Sao Paulo, Brazil (+55) Coverage: CMPC Copec Duratex Fibria Klabin Suzano Felipe Reis, Brazil (+55) Rodrigo Ordoñez, Chile (+56) Klabin: perfectly timing the equity offering overhang and share rebound. Our out-of-consensus negative read on the conditions proposed for Klabin s equity offering proved correct, and the stock declined 20% since the announcement in June. In August, with the stock reaching two-year lows, we upgraded Klabin to Buy, as we understood that the overhangs were already fairly priced in. Since the report, the stock price increased 25%. Fibria: curbing market enthusiasm on pulp prices. After hosting a meeting with Fibria s CFO and commercial director, we reiterated our cautious view on the stock, which was trading close to four-year highs based on the expectations that pulp prices would rise further. Our counter-consensus view materialized, pulp prices corrected, and Fibria s ADR s declined 18%. Suzano: a farsighted call on delayed capex and challenging FCF outlook. Back in September, we were early birds in highlighting Suzano s delayed capex issues and flagged that consensus was too bullish on 2014 FCF estimates a view that indeed was borne out in March, when a 60% higher-than-consensus capex was announced. Since then, Suzano has consistently underperformed the Ibovespa and its main peers. Duratex: pounding the table on unjustified stock underperformance. Following our meeting with Duratex s management at Santander s Brazil Conference in August, we reiterated our Buy rating, as the stock s steep 20% decline was unjustified. Three weeks after our report, the stock had rebounded 20%.
16 Latin American Equities Fabiola Gama / Toe Matsumura REAL ESTATE São Paulo, Brazil (+55) Mexico City, Mexico (+52) Jose Antonio Parra, Mexico (+52) Renan Manda, Brazil (+55) Coverage: BR Malls BR Properties Cyrela Brazil Realty Direcional Engenharia Even EZ Tec Fibra Uno Helbor Iguatemi MRV Engenharia Multiplan PDG Realty Rodobens Rossi Residencial Tecnisa Vesta EZTec as a high-quality asset has paid off. In early 2013 we named EZTec as our top pick among the Brazilian homebuilders due to still inexpensive valuation visà-vis its profitability level and the expected pickup in earnings driven mainly by the EZTowers project and reliable execution. By November, 2013, the stock was up 26% YTD, at which point we downgraded the stock purely on rich valuation. After the downgrade the stock declined 13% by year-end. Increases in TP for Fibra Uno and Vesta. In 1Q14 we published reports on Fibra Uno and Vesta, reinforcing our positive view on both names. We believe Fibra Uno will grow as it integrates properties and continues with organic growth. We expect Vesta to grow as it spends cash still available from its last follow-on to develop its pipeline, which includes a major project with Nissan. : Timely corporate access/events. Among the events we hosted in 2013 we highlight: (i) Lunch meeting with PDG s CEO, Mr. Carlos Piani: The event took place during a critical period in the company s restructuring process, providing timely information on PDG s turnaround and short-term outlook; (ii) Road show with MRV s IR Director, Ms. Monica Simão: Hosted in September, when MRVE3 began to outperform the market due to improved results, the road show clarified skeptical investors inquiries about the company s earnings recovery and intended pace of growth; and (iii) Road show with CEF: following much noise concerning the discontinuation of the French amortization system in mortgage origination, we were on the road with CEF to separate untruths from facts as well as to provide an update on the development of MCMV program. Property tour in Mexico City: We had a property tour in January of 2014, which included properties of Fibra Macquarie, Fibra Terrafina, and Fibra Danhos; the tour was useful to a major European client in making an investment decision.
17 Latin American Equities João Mamede (Sector Head) RETAILING Sao Paulo, Brazil (+55) Reinaldo Santana, Mexico (+52) Andres Soto, USA Bruno Taveira, Brazil Mauricio Serna, Mexico Ronaldo Kasinsky (+1) (+55) (+52) (+55) Coverage: Almacenes Exito Alsea B2W CBD Cencosud Chedraui Cia Hering Comerci Falabella Grupo Famsa Grupo Sanborns Hypermarcas IMC Kimberly Clark Liverpool Lojas Americanas Lojas Renner Natura Ripley Saraiva Soriana Sports World Unicasa Móveis Via Varejo Walmex We anticipated the sector de-rating in Brazil. In our December 12, 2013, Brazil Retail & Consumer Goods report, Uncertainties to Continue for a While Longer, we revised our sector outlook and highlighted our negative view on the consumption environment in Brazil for We also noted the demanding valuation at which most stocks were trading and we recommended selectivity. In February this year, retailers strongly underperformed, followed by a de-rating, with the sector s average 2014E P/E dropping from 19x to 16x. We prefer Mexico over Brazil Liverpool and Lojas Americanas are our top picks. We recently published the report Mariachi or Samba Dancing to Different Beats in which we highlight our more constructive view on Mexico over Brazil, as we expect economic activity to recover throughout 2014, especially in the second half of the year. Our top pick in the region is Liverpool, as we think this department store chain is well positioned to take advantage of the positive structural changes in the Mexican apparel segment. In Brazil, our top pick is Lojas Americanas, as we believe this Brazilian retail chain s model provides one of the best alternatives for the challenging economic environment the country is experiencing. We like the company s defensive profile (resilient sales mix and low dependence on credit) and its track record of good results. : We hosted a conference with listed and nonlisted retailers. The event allowed buy-side analysts to interact with companies that usually do not speak to the investor community.
18 Latin American Equities Valder Nogueira (Sector Head) TELECOM, MEDIA & TECHNOLOGY Sao Paulo, Brazil (+55) The go-to team to understand corporate events, including the Oi-PT amalgamation and the potential sale of TIM Brasil. We closely analyzed and have been successfully guiding investors in understanding the intricacies of the main corporate events in the sector. We first detected the major side effects on all parties of the proposed Oi-PT merger and have carefully guided investors on the non-obvious steps that may (or may not) lead to a potential M&A involving TIM Brasil through an inmarket consolidation or through the entry of a new player. The early bird on the TIM M&A news flow. We now have a more cautious stance. In late July we called investors attention to upcoming (September) changes in Telecom Italia s controlling group (Telco) that could led to M&A noise on TIM Brasil. From its low ~R$8/share in late July, TIMP3 rose almost 60% through late January. We grew more cautious on the stock before the peak price on the grounds that the intricacies of doing an in-market consolidation deal (where the most value could be added vs. entry of a newcomer) would make it unlikely to materialize. : Bruno Mendonça, Brazil (+55) Rodrigo Ordoñez, Chile (+56) Coverage Telecom: America Movil Entel Oi Telecom Argentina Telefonica Brasil TIM Participações Coverage Media: Televisa Coverage Technology: Linx Positivo Informatica Sonda Totvs Walter Chiarvesio, Argentina (+54) Custom-made and out-of-the-box corporate access. We moved away from the main tream large/group events and shifted our corporate strategy focus to small and custom-designed meetings with key industry specialists (in the telecom and tech sectors), selecting for these meetings company officials, legal/fiscal advisors, and private companies.
19 Latin American Equities Pedro Balcão (Sector Head) TRANSPORTATION Sao Paulo, Brazil (+55) Ana Reynal CFA, Mexico (+52) Bruno Amorim CFA, Brazil (+55) Coverage: ALL Arteris Asur CCR Copa Ecorodovias Embraer GAP Gol JSL LatAm Localiza OHL Mexico OMA Santos Brasil Tegma Triunfo Volaris Jose Antonio Parra, Mexico (+52) Euro-LatAm edge knowledge. Not only do we have a consistent analysis across LatAm, but we also work closely with our Infrastructure team in Europe.. Infrastructure: During the year, we have insisted on two calls: (i) that toll roads are bond proxies and therefore there was a significant risk for Brazilian names; and (ii) Overweight Mexico vs. Underweight Brazil, based on different momentum in long-term interest rates in the two countries and expensive valuations in Brazil (IRR below risk free) vs. reasonable valuations in Mexico (IRR above Ke). Thus, we have maintained a negative stance on CCR and a positive one on OHL Mexico. Mexican Airports: We downgraded Mexican airports in January 2013 and then upgraded the sector (with an in-depth report) in November 2013, with OMA as top pick. We find GAP s valuation reasonable but were concerned about the conflict among shareholders; with respect to ASUR, we identified a real risk of tariff falls and a rich valuation. Negative on airlines due to the challenging macro scenario that, in our view, should more than offset the correct conservative management stance on capacity. Copa was the exception. It was always our only Buy. We were the only analysts to publish a report on Volaris alerting the market to a price war in Mexico. Please see our initiation of coverage last December. Negative on Santos Brasil, due to a different view on competition and renewal of concession from consensus. Positive on Localiza. Throughout the year, we kept our 2013 earnings estimate clearly above the consensus, which proved correct as lower revenue was offset by lower depreciation, lower-than-expected financials, and a recovery in car sales in 2H13. Downgrade of Tegma in January 2013 was in anticipation of a very bad performance of Integrated logistics. We upgraded it to Buy on January 9, JSL: In-depth initiation of coverage in December 2012 with a Buy rating. : Access to top management and benchmark events, including the one EuroLatam InfraConference on the Street. During 2013, we had several interesting events, including: (i) a Brazilian Infrastructure trip, including site visits and meetings with top management and government officials; (ii) the VII EuroLatam InfraConference, with the presence of main companies in the sector in LatAm and Europe. (iii) At our Cancun conference, almost all LatAm Transportation and Infra companies were present and represented by top management.
20 Latin American Equities Jesus Gomez (Head of LatAm Research, Strategist) LATAM STRATEGY New York, USA (+1) Our out-of-consensus call of playing the Fed relief rally following the tapering talks correction in June by overweighting Brazil vs. Mexico generated outperformance of more than 26% in USD terms through October Our more negative than consensus view on Chilean equities due to political volatility and weak flow dynamics materialized, as the country was one of the worst-performing LatAm markets of Underweight stance toward consumption sectors toward end of 1H13 due to stretched valuations and macro headwinds, especially for food retailers in Mexico and discretionary retailers in Brazil, was consistent with strong underperformance. Strong overweight in education and investment-related sectors, such as cement & construction and infrastructure, materialized, as they were the best-performing sectors in Our staple publication LatAm All Stars, in which we outline our top 10 large/mid- and small-cap top picks, outperformed the benchmark by more than 9% in Topperforming calls were Gruma, IEnova, Bancolombia, and Cementos Argos. On the quantitative front, we accurately predicted vast majority of additions/deletions for rebalancing of MSCI LatAm indices. Outlook: The top-down view for LatAm remains challenging in the short term. As outlined in our Funds & Flows weekly reports, our case for more supportive equity flows in 2H14 remains, as better relative valuations in EM vs. DM coupled with lower headline risk stemming from China should continue to serve as a catalyst for investors, especially among institutional foreign investors that remain underweight LatAm. We continue to prefer Mexico and Colombia to Brazil and Peru. We remain neutral on Chile and Argentina. Top Picks: Andres Soto, USA (+1) Hector Chavez, Mexico (+52) Ambev, Banorte, Braskem, IEnova, Ultrapar, Copa, Gruma, OMA, and Parque Arauco. Arturo Espinosa, Mexico (+52) João Noronha, Brazil (+55) Daniel Gewehr, Brazil (+55) Stefano Rizzi, USA (+1) Francisco Errandonea, Chile (+56) Walter Chiarvesio, Argentina (+54)
Consultation on Proposed Changes to the Security Eligibility ibilit Rules for the Index May 2012 2012. All rights reserved. msci.com Background and Proposal BM&FBOVESPA ( BVMF ) has recently sent a letter
The Mexico Fund, Inc. Monthly Summary Report March 212 Prepared By: Impulsora del Fondo México, sc Investment Advisor to the Fund www.themexicofund.com The information presented in this report has been
Operator: Good morning ladies and gentlemen. At this time we would like to welcome everyone to América Latina Logística () s 2Q06 results conference call. Today with us we have Bernardo Hees the CEO; and
BRAZIL Liquid & Sophisticated Financial Markets Urban Larson Senior Product Specialist Standish Mellon Asset Management May 8, 2014 EFFECTIVE REGULATION Banco Central do Brasil (BCB) Commisão de Valores
CONFERENCE CALL SCRIPT CEMENTOS ARGOS FIRST QUARTER RESULTS 2009 Good morning, this is Jose Velez, CEO of Cementos Argos. I am joined by Mr. Ricardo Sierra, CFO and Maria Clara Aristizabal, Assistant to
BLACKROCK LATIN AMERICAN INVESTMENT TRUST PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 31 DECEMBER 2014 Investment Approach As an actively managed fund our aim is to outperform comparable funds and the benchmark
INTERNATIONAL CONFERENCE CALL ABOUT GENERAL SHOPPING BRASIL S FIRST QUARTER 2009 EARNINGS May 15, 2009 Operator: Ladies and gentlemen, thank you for standing by. This is General Shopping Brasil s conference
SulAmérica UBS Global Healthcare Services Conference February 11-13, 2008 New York Disclaimer The material that follows is a presentation of general background information about Sul América S.A. ( SulAmérica
Investment Insights 2012 First Quarter Equity Market Review By William Riegel, Head of Equity Investments After a volatile year in 2011, equity markets grew more confident in the first quarter of 2012.
Paper presented to the United Nations Conference on Trade and Development Intergovernmental Working Group of Experts on International Standards of Accounting and Reporting 30th Session, 6-8 November 2013,
A Defined Approach to Wealth Management Giving UWI access to the combined resources of one of the world s largest financial services firms. The Caribbean Group The information in this presentation is intended
team Luciano Campos* Analyst HSBC Bank Brasil SA +55 11 3371 8194 firstname.lastname@example.org Caio Moscardini* Analyst HSBC Bank Brasil SA +55 11 3847 5635 email@example.com *Employed by a
Master Limited Partnerships (MLPs): Frequently Asked Questions Yorkville Capital Management LLC www.yorkvillecapital.com 950 Third Avenue, 23 rd Floor New York, NY 10022 (212) 755-1970 Table of Contents
LATN AMERCA MARKET REVEW MAY EQUTES Emerging Market equities retreated in as a combination of factors including downward revisions to economic growth and normalizations of US Fed borrowing rates weighed
Pioneer Bond Fund COMMENTARY Performance Analysis & Commentary September 2015 Fund Ticker Symbols: PIOBX (Class A); PICYX (Class Y) us.pioneerinvestments.com Third Quarter Review Pioneer Bond Fund s Class
Cosan S/A EARNINGS PRESENTATION November 10, 2016 EARNINGS PRESENTATION 2 DISCLAIMER This presentation contains estimates and forward-looking statements regarding our strategy and opportunities for future
Investing Using the Business Cycle Presented by Paul Martin M A R T I N C A P I T A L A D V I S O R S LLP A Registered Investment Advisor 100 Congress Avenue, Suite 2000, Austin, Texas 78701 3463 Magic
Latin American Equity Research Mexico City, August 2, 2007 LIVERPOOL Hold Your Horses Downgrading to Underperform Joaquin Ley* Company Report Mexico Retail UNDERPERFORM Vivian Salomon* Mexico: Banco Santander,
FOR IMMEDIATE RELEASE O-I REPORTS FULL YEAR AND FOURTH QUARTER 2014 RESULTS O-I generates second highest free cash flow in the Company s history PERRYSBURG, Ohio (February 2, 2015) Owens-Illinois, Inc.
November 14, 2014 Over a barrel: Causes and consequences of the fall in oil prices Executive Summary The $30 fall in oil prices since July reflects greater U.S. supply as well as worries about a significant
Exchangeable Derivatives Market in Brazil 2012 Exchangeable Derivatives Market in Brazil How Itaú BBA is structured 2 Itaú BBA Exchangeable Derivatives in Brazil 2012 Public Information Itaú Unibanco Group
ECONOMICS January 6, 2016 Brazil Inflation The Counterfactual Mauricio Molan* firstname.lastname@example.org 5511-3012-5724 Inflation was one of the most negative aspects of the Brazilian economy in 2015. Not
Good morning ladies and gentlemen. At this time we would like to welcome everyone to the Aliansce s 2Q15 earnings conference call. Today with us, we have Mr. Henrique Cordeiro Guerra, Executive Director,
BERYL Credit Pulse on High Yield Corporates This paper will summarize Beryl Consulting 2010 outlook and hedge fund portfolio construction for the high yield corporate sector in light of the events of the
Drobny Guest Research September 12, 2012 3701 Highland Ave, Suite 302, Manhattan Beach, CA 90266 email@example.com (310) 545-6996 ------------------------------------------------------------------------------------------------------------
Half year results 2011 29 July 2011 Bert De Graeve, Chief Executive Officer Bruno Humblet, Chief Financial Officer Address by Bert De Graeve, Chief Executive Officer Introductory remark The consolidated
Operator: LUPATECH S.A. Corporate Taxpayer's ID (CNPJ/MF): 89.463.822/0001-12 Company Registry (NIRE): 43300028534 Publicly-held Company Novo Mercado Conference Call Transcript 1Q10 in English May 14th
0 Banco Santander : Solid results in 2Q14. Sound outlook for 2015 August 2014 Important information 1 Banco Santander caution that this presentation contains forward looking statements within the meaning
BM&FBOVESPA announces November 2009 market performance Bovespa segment sets three trading records via Home Broker. BM&F segment sets Direct Market Access trading records via Provider and Colocation São
This paper examines the impact rising rates are likely to have on high yield bond performance. We conclude that while a rising rate environment would detract from high yield returns, historically returns
Featured Solution May 2015 Your Global Investment Authority The Credit Analysis Process: From In-Depth Company Research to Selecting the Right Instrument In today s low yield environment, an active investment
SIGNATURE GLOBAL ADVISORS MARKETS UPDATE AUGUST 3, 2011 The following comments come from an internal interview with Chief Investment Officer, Eric Bushell. They represent Signature s current market views
White Paper: NPH Fixed Income Research Update Authored By: Bob Downing, CFA NPH Senior Investment & Due Diligence Analyst National Planning Holdings, Inc. Due Diligence Department National Planning Holdings,
Summary Prospectus February 1, 2015 Deutsche Latin America Equity Fund (formerly DWS Latin America Equity Fund) Class/Ticker A SLANX B SLAOX C SLAPX INST SLARX S SLAFX Before you invest, you may want to
RICHARD: Welcome to the third quarter 2013 Endesa Colombia results conference call. My name is Richard and I will be your operator for today s call. At this time all participants are in a listen-only mode.
2015 Mid-Year Market Review Cedar Hill Associates, LLC www.cedhill.com 6111 North River Road, Suite 1100, Rosemont, Illinois 60018 Phone: 312/445-2900 An Affiliate of MB Financial Bank 2015 Major Investment
The Equity Evaluations In Standard & Poor s Stock Reports The Equity Evaluations in Standard & Poor s Stock Reports Standard & Poor's Stock Reports present an in-depth picture of each company's activities,
RIPLEY CORP presentation January 2009 Ripley Corp 1. Ripley Today 2. Ripley Chile 2.0 3. Ripley Peru 4. Financing 5. Main goals Ripley Today why invest Ripley? Because Is a big player in the department
GRUPO SENDA AUTOTRANSPORTE, S.A. DE C.V. ANNOUNCES FIRST QUARTER 2012 RESULTS M onterrey, Nuevo Leon, Mexico May 9, 2012 Grupo Senda Autotransporte, S.A. de C.V. ( the Company or Grupo Senda ) today announced
Fitch Affirms MRV's Rating at 'AA-(bra)'; Outlook Stable Fitch Ratings-Rio de Janeiro-29 July 2015: Fitch Ratings has affirmed MRV Engenharia e Participacoes S.A.'s (MRV) long-term national scale rating
Contact: Marcela.Goldstein@s2publicom.com.br Latin America Trails North America, Europe, and Asia in Placing Women on Corporate Boards (Washington, D.C., May 15, 2015) Nearly half (47) of the 100 largest
LUPATECH S.A. CNPJ/MF nº 89.463.822/0001-12 NIRE 43300028534 Companhia Aberta de Capital Autorizado Novo Mercado Conference Call Asia Transcript 4Q09 in English Operator: 2Q09 Good morning, welcome everyone
Financial Information Solid results with in all key financial metrics of 23.6 bn, up 0.4% like-for like Adjusted EBITA margin up 0.3 pt on organic basis Net profit up +4% to 1.9 bn Record Free Cash Flow
Innovative Technology Solutions for Sustainability ABENGOA 2014: Financial Review Barbara Zubiria EVP, Capital Markets & IR 8th Annual Analyst and Investor Day April 3 & 4, 2014 Forward-looking Statement
Ontex Q3 2015: Trading in line with Company expectations and full year outlook reiterated Aalst-Erembodegem, November 5, 2015 - Ontex Group NV (Euronext Brussels: ONTEX; Ontex, the Group or the Company
Portfolio Series Portfolio Review Second Quarter 2010 We are pleased to introduce Portfolio Review, a new quarterly report on Portfolio Series. 3 Portfolio Series Income Fund 7 Portfolio Series Conservative
OVERVIEW - History 1 1991 Beginning of operations as a multiple bank 2002 Nassau Branch 2005 New York Broker dealer 2009 Beginning of strategic partnership with 2015 Promotiva S.A. (payroll loans origination
www.medirectbank.be Quarterly Report Wealth Management July - September 2015 All content 2016 MeDirect More information visit www.medirectbank.be In a volatile year such as 2015, a good asset manager proves
Tony Wible, CFA 908-470-3160 firstname.lastname@example.org Media and Entertainment Price: $84.98 Fair Value Estimate: $100.00 52-Week Range: $60.80 - $88.25 Market Cap (MM): $70,075 Shr.O/S-Diluted (mm): 824.6 Average
GFNORTE Results Conference Call October 25 th, 2013. Material Events Organizational Changes. As part of ongoing efforts to focus the organization towards a client-centered business model, the following
Institutional Presentation SEPTEMBER / 2015 WHO WE ARE 2 WHO WE ARE TOTVS is a business solutions company founded and based in Brazil, with clients in 39 countries and 11 Development Centers located in
Latin American Equity Research Mexico City, July 22, 2008 Company Update Mexico Homebuilders HOMEX Downgrading to Hold on Worsening Working Capital and Increased Debt Gonzalo Fernandez* Mexico: Banco Santander
Manuel Sánchez Santander Global Fixed Income Summit London, England, September 20, 2012 Contents 1 Structural features 2 Recent developments and outlook 3 Inflation and monetary policy 4 Economic challenges
RESULTS 2014 Santander grows business in all markets and makes a profit of EUR 5.816 billion in 2014 In 2014, Santander continued to support its clients, growing loans by 5%. We did it with a sustained
MARCH 215 Utilizing Utilities in Shareholder Yield FROM THE EPOCH SHAREHOLDER YIELD TEAM Utilities stocks have historically fit the profile of shareholder yield companies and have remained a significant
PRUDENTIAL INTERNATIONAL INVESTMENTS ADVISERS, LLC. Global Investment Outlook & Strategy October 2015 Market Volatility likely to Remain Elevated on China Growth Concerns & Fed Rate Uncertainty. Stocks
EDP Energias do Brasil Investor Day -May 2012 Oporto, May 22 nd, 2012 0 Disclaimer This presentation may include forward looking statements of future events or results according to regulations of the Brazilian
Page 1 AMBEV REPORTS 2014 FOURTH QUARTER AND FULL YEAR RESULTS UNDER IFRS São Paulo, Ambev S.A. [BOVESPA: ABEV3; NYSE: ABEV] announces today its results for the fourth quarter and full year 2014. The following
CORPORATE PARTICIPANTS Disclaimer Mr. Paulo Polezi Finance and Investor Relations Officer Mr. Wilson Watzko Controller Officer Mr. Luís Fernando Oliveira Investor Relations The statements that may eventually
The Latin American Integrated Market 16/09/2012 MILA The Latin American Integrated Market looking to diversify, expand and improve the attractiveness of equity trading for the three countries, Colombia,
Prosegur 9M 2013 Results November 12th, 2013 Compañía de Seguridad S.A. all rights reserved 1 Highlights in the period The transfer to clients of the increase in the labour costs in Brazil (ARV) is being
Disclosure of 1Q13 Results José Rubens de la Rosa CEO Presentation: Carlos Zignani Investor Relations Director José Antonio Valiati Controller and Chief Financial Director Thiago A. Deiro Investor Relations
GrandVision reports 2.8 billion Revenue and 449 million EBITDA for 2014 Schiphol, the Netherlands 18 March 2015. GrandVision N.V. publishes Full Year and Quarter 2014 results. 2014 Highlights Revenue grew
Press Release Banco Santander s profit rose 90% to EUR 4.370 billion in 2013 BUSINESS. Deposits were stable at EUR 607,836 million, while mutual funds grew by 14% to EUR 93,304 million. Loans decreased
Investment Perspectives For high-yield bonds, market volatility can bring new opportunities Kevin Lorenz and Jean Lin, portfolio managers for TIAA-CREF High-Yield Fund Article Highlights: The decline in
Global economic outlook and Latin America Luis Oscar Herrera BTG Pactual Andean Region & Argentina October, 2015 For additional information, please read carefully the notice at the end of this presentation.
August 2014 Gauging Current Conditions: The Economic Outlook and Its Impact on Workers Compensation The exhibits below are updated to reflect the current economic outlook for factors that typically impact
Latin American Equity Research Mexico City, May 1, 2008 URBI Company Update Mexico Cement & Construction BUY Debt to Grow at a Slower Pace Lowering Target Price but Reiterating Buy Gonzalo Fernández* Vivian
Frankfurt, June 5th 2009 Goldman Sachs European Financials Conference Mr. Roberto Higuera, CEO Disclaimer This presentation has been prepared by Banco Popular solely for purposes of information. It may
International Conference Call Natura 2 nd Quarter 2012 Earnings Results July 27, 2012 Operator: Good morning ladies and gentlemen. At this time we would like to welcome everyone to Natura s 2012 2 nd Quarter
Wells Capital Management Economic and Market Perspective November 13, 2015 Bringing you national and global economic trends for more than 30 years The U.S. Stock Market Resides at a Unique Global Zip Code
11:00 a.m. (Brasilia time) CORPORATE PARTICIPANTS Disclaimer Mr. Paulo Polezi Finance and Investor Relations Officer Mr. Wilson Watzko Controller Officer Mr. Luís Fernando Oliveira Investor Relations The
BTMU Focus Latin America Peru: macroeconomic performance Peru: (Q ) MUFG UNION BANK Economic Research (New York) Hongrui Zhang Latin America Economist email@example.com +()8-8 July, I. Growth Momentum
BRSA Bank Only Macro Outlook Q1 GDP growth at 3.2%, mostly backed by net exports. Budget deficit was TRY 6.7 billion in H1 12, one third of Latest GDP figure is supportive of the soft landing the government