January 23rd 2015
Credicorp Capital Research
Andean Daily Report
CREDICORP CAPITAL RESEARCH
Chile: +(562) 2450 1600
Colombia: +(571) 339 4400 Ext. 1505
Peru: +(511) 205 9190 Ext. 36070
V a lua tions
P / E
EV / EBITDA
P / BV
2 0 14 E 2 0 15 E 2 0 14 E 2 0 15 E
LTM
Country
CHILE
 Company Update: E-CL: Attractive valuations for a bet on growth; one
more catalyst yet to occur. Reiterating BUY. (Full report attached)
 Company Update: Besalco - Updating full year estimates (Full report
attached)
 Company Update: SQM-B - Iodine price pressure to continue through
2015. Reiterating our HOLD recommendation. (Full report attached)
COLOMBIA
 Grupo Aval announces that it will use its equity reserves to comply
with the corporate wealth tax due in the new tax reform
PERU
 Southern Copper Corporation obtains the government approval for the
Tía María project
Chile
18.1x
15.6x
9.1x
8.4x
1.6x
Colombia
18.8x
21.4x
8.0x
8.2x
1.3x
Peru
14.9x
13.6x
7.9x
7.2x
1.3x
Index
Last
S&P MILA 40
S&P INDEX
Chile
Colombia
Peru
Mex ico
Brazil
Equities Latam
608
2,063
3,866
1,412
13,514
43,121
49,443
2,768
Fx Rates
Last
CLP / US$
UF / CLP
Peru / US$
Colombia / US$
Brazil / US$
CLP / Euro
Euro / US$
625
24,586
3.01
2,373
2.57
710
1.14
Commodities
Last
Copper (US$/lb)
Gold (US$/oz)
Silv er (US$/oz)
Brent (US$/bbl)
Pulp (US$/MT)
WTI (US$/bbl)
258
1,301
18.4
47
931
46
D/D %
YTD%
Local USD
Local USD
2.0%
2.0%
-4.5% -4.5%
1.5%
1.5%
0.2%
0.2%
1.6%
2.0%
0.4% -2.5%
1.7%
1.9%
-6.7% -6.4%
0.9%
1.0%
-8.7% -9.4%
1.5%
2.6%
-0.1%
1.0%
0.4%
2.0%
-1.1%
1.9%
1.8%
1.8%
1.5%
1.5%
D/D %
YTD%
-0.6%
0.0%
0.0%
-0.2%
-1.5%
-2.7%
-2.1%
2.9%
-0.2%
0.9%
-0.2%
-2.9%
-3.1%
-6.1%
D/D %
Local USD
-1.3%
0.5%
0.9%
0.7%
-0.1%
-2.7%
YTD%
USD
-8.7%
9.8%
17.7%
-16.6%
-100.0%
-13.7%
Local
This report is property of IM Trust S.A. and/or Credicorp Capital Colombia S.A Sociedad Comisionista de Bolsa and/or Credicorp Capital S.A.A. and/or its subsidiaries (hereinafter jointly called “Credicorp
Capital”), therefore, no part of this the material or its content, nor any copy of it may altered in any way, transmitted, copied or distributed to any third party without prior and express written consent of
Credicorp Capital. In making this report, Credicorp Capital has relied on information from public sources. Credicorp Capital has not verified the truthfulness, completeness or accuracy of the information
accessed, nor has audit the information in any way. Accordingly, this report does not constitute a statement, assertion or guarantee (express or implied) as to the truth, accuracy or completeness of the
information contained herein or any other written or oral information furnished to any person and/or their advisors.
Chile
Company News
Company Update: E-CL – BUY (Full report attached)
Attractive valuations for a bet on growth; one more catalyst yet to occur. Reiterating BUY.
Price: CLP 940 ; Target Price: CLP 1,135
We are updating our coverage on E-CL, maintaining our BUY rating on the stock and introducing
our new 2015YE T.P. of CLP 1,135, up from CLP 995, implying a total return of 23,6%. We have
included in our projections the latest announcements regarding the ~5,000 GWh contract in the
SIC and the construction of IEM1 in the SING. In addition, we expect the system’s annual
expansion plan to be presented towards the end of the month, officially including E-CL’s
interconnection project as a trunk line. We believe the market is waiting for this recognition to
occur before fully pricing-in IEM1.
Company Update: Besalco – HOLD (Full report attached)
Updating full year estimates
Price: CLP 310 ; Target Price: CLP 350
We are updating our FY2014 estimates and downgrading our 2015YE target price from CLP 464
to CLP 350, mainly due to a change in valuation parameters (levered beta from 1.3 to 1.5, after a
sharp increase in debt/equity ratio). We maintain our HOLD recommendation.
Company Update: SQM – HOLD (Full report attached)
Iodine price pressure to continue through 2015
Reiterating our HOLD recommendation.
Price: CLP 15,161 ; Target Price: CLP 16,100
We are updating our coverage of SQM, maintaining our HOLD recommendation, and increasing
our 2015YE target price from $ 15,000 to $ 16,100, implying a total return of 8%. We expect lower
Iodine prices to continue throughout next year, in addition to lower volumes and prices in the
lithium business, which should have a negative impact on results. On the positive side, potash
prices should post a slight recovery in 2015, mainly driven by the closure of Uralkali’s mine,
Solikamsk - 2 (2.3 mn tons). We believe current valuations are fair, reflecting lower profitability
and corporate governance issues, partially offset by the savings plan implemented by the
company, which aims to achieve USD 180mn in savings through 2015.
2
Colombia
Company News
Grupo Aval announces that it will use its equity reserves to comply with the corporate
wealth tax due in the new tax reform
(GRUPO AVAL: HOLD; T.P.: COP 1,530)
This decision was made yesterday at a shareholders meeting and now the company expects to
use its equity reserves for the tax due on 2015, 2016 and 2017. The announcement goes in line
with article 10 of the law 1739 from 2014. At first glance, this decision eases cost-to-income ratio
concerns from the tax bill. Further, this means that ROAE will have a positive preassure, given a
lower equity. Nonetheless, it also decreases the tangible ratio of the conglomerate.
Peru
Economics and Politics
Southern Copper Corporation obtains the government approval for the Tía María project
The Peruvian Government granted the licenses to begin the construction of the Tia María mine to
Southern Copper Corporation, a subsidiary of the México Group, which represents an investment
of USD 1,200mn. The company indicated that this project which was put on hold for over two
years due to the lack of agreement with local communities, would have a production capacity of
120,000 tons of copper cathodes.
3
Trading Information
Traded Volume
Country
Vol. (USDmn)
Best sector
Worst Sector
Chile
132.1
Utilities / +2.00%
-
Colombia
45.3
-
-
Peru
9.8
Mining / +1.42%
Agribusiness / -0.32%
Volume Leaders
Chile
USD Th.
Colombia
Clp. %
USD Th.
Peru
Cop. %
USD Th.
Pen %
Enersis
$ 26,011.6
2.40%
Ecopetrol
$ 11,369.0
1.04%
Ferrey corp
$ 2,201
0.76%
Endesa
$ 13,068.8
1.78%
PFCemargos
$ 5,323.1
3.89%
Bco. Continental
$ 1,080
-0.46%
Sonda
$ 10,334.5
0.37%
CLH
$ 5,102.5
3.58%
Rio Alto Mining
$ 947
1.82%
COP
Cop.%
Top Winners
Top Winners & Losers
Chile
Top Winners
Banmedica
CLP
Colombia
Clp.%
Top Winners
Peru
PEN / USD
%
$ 1,090
4.70%
Celsia
$ 5,560
5.90%
Minsur
$ 1.65
3.77%
Colbun
$ 175
3.22%
ISA
$ 8,060
4.27%
Pacasmay o
$ 5.08
3.67%
Bsantander
$ 32
2.77%
Pacific Rubiales
$ 7,200
4.20%
Trev ali
$ 0.85
2.41%
Top Losers
CLP
COP
Cop.%
Top Losers
$ 5,800
-7.20%
Siderperu
$ 0.18
-5.26%
Clp.%
Top Losers
PEN / USD
%
CAP
$ 2,046.7
-3.06%
Canacol
CFR
$ 148.2
-1.91%
-
-
-
Aceros Arequipa
$ 0.45
-2.17%
Vapores
$ 21.5
-0.92%
-
-
-
Bco. Continental
$ 4.37
-0.46%
Sources: Bloomberg & Credicorp Capital
4
Economic Calendar
Chile
Date
8-Jan
8-Jan
12-Jan
14-Jan
15-Jan
Time
8:00
8:00
8:30
8:30
18:00
Indicator / Event
CPI MoM
CPI YoY
Overnight Rate Target
Period
Consensus
Dec-14
-0.3%
Dec-14
4.8%
Central Bank´s Economist Survey
Central Bank´s Traders Survey
Jan-15
3.0%
Credicorp
Capital
-
3.0%
Actual
Previous
-0.4%
4.6%
0.0%
5.5%
3.0%
3.0%
Actual
Previous
-0.9%
8.4%
0.3%
11.3%
Actual
Previous
3.25%
5.6%
0.3%
3.50%
5.4%
2.4%
Colombia
Date
16-Jan
16-Jan
Time
18:00
18:00
Indicator / Event
Industrial Production YoY
Retail Sales YoY
Period
Nov-14
Nov-14
Consensus
0.6%
9.1%
Credicorp
Capital
-
Consensus
3.50%
5.5%
2.0%
Credicorp
Capital
-
Peru
Date
15-Jan
15-Jan
15-Jan
Time
20:00
-
Indicator / Event
Reference Rate
Unemployment Rate
Economic Activity YoY
Period
Jan-15
Dec-14
Nov-14
Sources: Bloomberg & Credicorp Capital
5
Important Disclosures
This report is property of IM Trust S.A. and/or Credicorp Capital Colombia S.A. Sociedad Comisionista de Bolsa and/or Credicorp
Capital Perú S.A.A. and/or its subsidiaries (hereinafter jointly referred to as “Credicorp Capital”), therefore, no part of this the material
or its content, nor any copy of it, may be altered in any way, transmitted, copied or distributed to any third party without prior and
express written consent of Credicorp Capital.
In making this report, Credicorp Capital has relied on public information. Credicorp Capital has not verified the truthfulness,
completeness or accuracy of the information accessed, nor has audited the information in any way. Accordingly, this report does not
constitute a statement, assertion or guarantee (express or implied) as to the truth, accuracy or completeness of the information
contained herein or any other written or oral information furnished to any person and/or their advisors.
Unless otherwise stated, the information used in this report is not confidential, nor constitutes privileged information that may mean
the violation of the rules of the stock market, or that could mean failure to comply with copyright legislation.
This report is not intended and shall not be understood in any way as to: a) predict the future or guarantee a specific financial result;
b) ensure the fulfillment of the scenarios described in it; c) be an investment advice or opinion that could be considered as Credicorp
Capital recommendations.
The information contained in this report is only for referential purposes. While reading it, you should consider that the information
contained in this report may be oriented to a specific segment of clients or investors, with a certain risk profile that may not be yours.
Unless otherwise stated, this report does not contain investment recommendations or other suggestions that may be understood to
be given under the stock market intermediaries’ special duty to clients classified as investors. When recommendations are made, the
report will clearly specify the investors risk profile to which the recommendation is intended. Credicorp Capital can seek and/or
conduct business with companies that are mentioned in the report, and they can also execute buying and selling transactions of
shares that are mentioned.
It is important to state that the fluctuation in exchange rates can have adverse effects on investments values.
It is client responsibility to determine how to use the information contained in this report. Hence, the client is the sole responsible for
investment decisions or any other operation he/she might perform in the stock market based on this report. In other words, the
investment or operation result made by the client using the information contained in this report is of her/his sole responsibility.
Credicorp Capital does not assume any responsibility, obligation or duty for any action or omission derived from the use of this
document.
Credicorp Capital recommends to their clients to ask for professional advice from financial, legal, accounting, tax experts before
adopting an investment decision. Under no circumstances the information contained in this report may be considered as a financial,
legal, accounting or taxation opinion, neither as a recommendation or investment advice.
Rating System
N° of Companies
Companies covered
covered with this rating with this rating (% )
Rating
Definition
Buy
Expected returns of 5 percentage points or more in excess over
the expected return of the local index, over the next 12-18 months.
35
43%
Hold
Expected returns of +/- 5% in excess/below the expected return
of the local index over the next 12-18 months.
35
43%
Underperform
Expected to underperform the local index by 5 percentage points or
more over the next 12-18 months.
10
12%
Under Review /
Restricted
Company coverage is under review or restricted.
2
3%
82
100%
Total
6
CONTACT LIST
ANDEAN RESEARCH TEAM
SALES & TRADING
Heinrich Lessau
Hugo Horta
Director of Research
[email protected]
Director of Sales & Trading
[email protected]
EQUITY RESEARCH
EQUITY SALES & TRADING
CHILE
COLOMBIA
PERU
Hernán Arellano
Francisca Manuschevich
César Cuervo
Héctor Collantes
Head of Equities
[email protected]
Head of Equity Research
[email protected]
# (562) 2446 1798
Head of North Andean Equity Research
[email protected]
# (571) 339 4400 Ext 1012
Head of Equity Research
[email protected]
# (511) 205 9190 Ext 33052
Javier Günther
Marilyn Macdonald
Cristián Castillo
Christopher DiSalvatore
Jaime Pedroza
Fernando Pereda
Associate: Retail & Financials
[email protected]
# (562) 2446 1724
Senior Analyst: Utilities
[email protected]
# (571) 339 4400 Ext 1025
Senior Analyst: Cement & Utilities
[email protected]
# (511) 205 9190 Ext 37856
International Equity Sales
[email protected]
# (562) 2450 1695
International Equity Sales
[email protected]
# (4477) 7151 5855
International Sales Trader
[email protected]
# (786) 999 1633
CHILE
PERU
COLOMBIA
Arturo Prado
Juan C. Domínguez
Iván Bogarín
René Ossa
Rodrigo Zavala
Juan A. Jiménez
Senior Analyst: Natural Resources
[email protected]
# (562) 2450 1688
Senior Analyst: Banks
[email protected]
# (571) 339 4400 Ext 1026
Senior Analyst: Retail & Others
[email protected]
# (511) 416 3333 Ext 33055
International Equity Sales
[email protected]
# (562) 2651 9324
Head of Equity - Peru
[email protected]
# (511) 313 2918 Ext 36044
Head of International Equity Sales
[email protected]
# (571) 339 4400 Ext 1701
Andrés Ossa
Sebastián Gallego
Tamara Vasquez
Christian Munchmeyer
Ursula Mitterhofer
Santiago Castro
Analyst: Utilities, Telecom & I.T.
[email protected]
# (562) 2651 9332
Analyst: Oil & Gas
[email protected]
# (571) 339 4400 Ext 1594
Research Assistant
[email protected]
# (511) 416 3333 Ext 37946
International Sales & Trading
[email protected]
# (562) 2450 1613
Sales & Trading
[email protected]
# (511) 313 2918 Ext 32922
International Sales & Trading
[email protected]
# (571) 339 4400 Ext 1344
Tomás Sanhueza
Carlos E. Rodriguez
Analyst: Food & Beverages, Healthcare
[email protected]
# (562) 2446 1751
Analyst: GEA & infrastructure
[email protected]
# (571) 339 4400 Ext 1365
Pilar González
FIXED INCOME SALES & TRADING
Analyst: Transport
[email protected]
# (562) 2446 1768
Felipe García
Lourdes Alamos
Head of Fixed Income
[email protected]
Research Coordinator & Holdings Analyst
[email protected]
# (562) 2450 1609
FIXED INCOME & ECONOMICS RESEARCH
CHILE
COLOMBIA
PERU
Gonzalo Covarrubias
Carlos Sanchez
Alfredo Bejar
Head of Capital Markets
[email protected]
Head of Fixed Income
[email protected]
Head of Fixed Income / FX Trading
[email protected]
CHILE
COLOMBIA
PERU
# (562) 2450 1635
# (571) 323 9154
# (511) 205 9190 Ext 36148
Paulina Yazigi
Daniel Velandia
Irvin León
Guido Riquelme
Christian Jarrin
Vallerie Yong
Head of Research & Chief Economist
[email protected]
# (562) 2450 1637
Head of Research & Chief Economist
[email protected]
# (571) 339 4400 Ext 1505
Senior Fixed Income Analyst
[email protected]
# (511) 416 3333 Ext 37854
Head of Sales
[email protected]
# (562) 2446 1712
RM Fixed Income Offshore
[email protected]
# (571) 340 2591
Local FI Senior Trader
[email protected]
# (511) 313 2902 - # (511) 313 2908
Felipe Lubiano
Sergio Ferro
Alberto Zapata
Belén Larraín
Andrés Valderrama
Evangeline Arapoglou
Senior Fixed Income Analyst
[email protected]
# (562) 2651 9308
Fixed Income Analyst
[email protected]
# (571) 339 4400 Ext 1609
Fixed Income Analyst
[email protected]
# (511) 205 9190 Ext 36018
Head of International FI Sales
[email protected]
# (562) 2446 1720
Fixed Income Trader
[email protected]
# (571) 323 9163
Senior International FI Trader
[email protected]
# (511) 313 2902 - # (511) 313 2908
Paulina Valdivieso
Camilo A. Durán
Paz Stepke
José Andrés Riveros
Lizeth Espíritu
Fixed Income Analyst
[email protected]
# (562) 2651 9337
Macro Analyst
[email protected]
# (5511) 339 4400 Ext. 1383
International Fixed Income Sales
[email protected]
# (562) 2651 9336
Fixed Income Trader
[email protected]
# (571) 339 4400 Ext 1180
Fixed Income Trader
[email protected]
# (511) 313 2902 - # (511) 313 2908
Andrés Osorio
Benjamín Diaz
Economist
[email protected]
# (562) 2446 1760
Local Fixed Income Sales
[email protected]
# (562) 2446 1738