Actinver’s Favorites January 15, 2018

Equity Research @ActinverRsrch

www.actinveranalisis.com

Actinver Research
www.actinveranalisis.com.mx

Actinver: (55) 1103 6600

Methodology Actinver Research

We present our “Actinver’s Favorites” report, which is built on an investment horizon of 18 at least
months. We show the companies that we expect are going to have an important value generation;
either through revenue increases or higher operative efficiencies and that have solid
fundamentals.

We have divided the selection of stocks in two groups, with a second one consisting of medium-
and low market cap companies, which given a smaller market liquidity necessarily command a
longer investment horizon. We have designed such section as “Actinver’s Favorites, 2020
Outlook”.

This report will be updated weekly and will be distributed on Mondays. In addition, each month
we will revise each one of the companies mentioned here and each quarter the results report will
be considered to make the necessary adjustments. If at any moment a relevant news surged, our
research team will make the corresponding update.

The methodology used for this report is based in: a) Discounted Flows (DCF); b) comparable
multiples; and c) sum of the parts valuation, among others.

The companies are shown by alphabetical order in this report and the main sources used are a)
Actinver Research; b) the Company; c) BMV.

2
Methodology Actinver Research
Process for including a stock into Actinver’s Favorites

• The analyst identifies an opportunity and submits the required documentation to the Analysis Committee for
its consideration.

• The Committee is composed by the Equity Analysts, the Economy Strategist and the Equity Research
Executive Director

• The analyst presents his recommendation including financial estimates and catalysts that the market has
not yet incorporated.

• The analyst explains the arguments for the potential return expected for the next 12 months and beyond.

• The analyst presents the market consensus for price targets and recommendations.

• The stock’s price behavior is reviewed, as well as the brokers who are buying and/or selling. The Committee
also identifies the main shareholders.

• Internal and external risks related to the company are revised.

• The valuation based on Multiples and Discounted Cash Flows is discussed.

• The analyst includes a safety margin to his price target.

• The Committee accepts or rejects the proposal.

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Actinver’s Favorites Actinver Research

Company Comments

The second largest Bottler in America have an important upside potential in the U.S. and South America
1 AC
markets.

Specialized in SMEs. One of the fastest growth portfolios and better asset quality. One of the cheapest
2 BBAJIO
stocks.
3 BIMBO The largest bakery in the World, recent acquisitions will add significant value to the company’s figures

4 CEMEX Substantial cheapening because of its dollar denominated debt.

5 FUNO Largest FIBRA in Mexico, with over 7.3 million sqm of gross leasable area (GLA) and 519 properties.

One of the manufacturers with lowest costs in the world, exponential EBITDA growth once copper prices
6 GMEXICO
rebound; the railway business is worth 25%.

7 GRUMA High exposure to hard currencies and low elasticity in product demand.

8 MEXCHEM Expected strong operating results, exposure to hard currencies & short-term catalyzers.

Leading industry growth and a solid financial position. The company’s new strategy incorporating middle-low
9 LIVEPOL
income population (through Fabricas de Francia and Suburbia) will boost its revenue base.

Consolidation of the formal retail industry in Mexico, fast recovery in its financial position following the
10 SORIANA
Comerci acquisition, the cheapest retailer.

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Actinver’s Favorites, 2020 Outlook — (Small and Medium Cap Companies) Actinver Research

Company Comments

Expected demand improvement and lower fuel consumption, plus option to expand fleet substantially.
1 AEROMEX

2 CADU Operating margins will continue improving in the coming years supported by higher average selling price.
Largest limited-service hotel chain in Mexico and the best positioned to take advantage of the lodging
3 HCITY
sector’s accelerated growth.
Market leader, as well as the only public gym chain with a Premium service in Mexico. The company has an
4 SPORT
aggressive expansion plan for 2018-20.

Company with the highest EBITDA and Net Income by house sold, supported by a business model with a
5 VINTE
clear profitability-focused strategy

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Actinver’s Favorites
AC (BUY, PT P$155.0)
Actinver Research
AC Price Target 2018: $155.00 Revenues Distribution
Target P/E f or 2018: 21.1x
• Second largest Coca Cola bottler in Latam.
• The most profitable bottler in the continent with an EBITDA South
margin above 20%. America
México
33%
• Although the trend for eat-healthy products remain, sodas 43%
continue to be an important base for the Latam diet, especially USA
in Mexico. 24%
• AC’s revenues are diversified with 30% coming from juices,
water, milk and snacks. 200,000 22%

• Active company in M&A, the latest acquisition was a Latin- 160,000

American company called Lindley, adding 16% to their top line. 21%

120,000
• We expect the company to continue consolidating the industry 20%
80,000

19%
40,000

0 18%
Market Data Multiples 2017e 2018e 2019e 2016 2017e 2018e 2019e
Price P$132.01 EV/Revenue 2.1x 1.8x 1.6x Sales EBITDA Margin

Target Price P$155.00 EV/EBITDA 11.0x 9.0x 7.8x

Dividend 2.23% P/E 19.2x 17.9x 15.2x
Return (e ) 19.6% ROE 12.3% 11.9% 12.8%
Market Cap US$12,270m ROA 5.7% 5.9% 6.8%
EV US$14,577m ROIC 14.2% 16.1% 17.2%
Float 20% ND/EBITDA 1.0x 0.6x 0.2x
Shares 1,764m Dividend 2.1% 2.2% -2.2%

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BBAJIO (BUY, PT P$45.0)
Actinver Research
BBAJIO Target Price: $45.0 Loan portfolio
P/E 2018e at target: 12.6x
Governme
• Focused on SMEs, the niche with the highest growth potential in Mexico. Its Mortgages nt Consumer
5% 7% 1%
portfolio is growing 18.7% YoY during 2Q17. BBajio's NPLs index is 0.9%, one of
Financial
the best asset quality levels in the industry. 7%

• Strong profitability improvement. NIM + 5.4% vs 4.2% average '11-'13. Current

ROA stands at 1.7% vs industry's 1.4%, we expect BBajio's ROA to reach 1.9% for
2017YE. Business
80%
• BBajio holds a market share of 5.5% in company-sector loans in Mexico. In
Guanajuato, one of the States with higher growth pace in Mexico, BBajio lends 1
of each 3 pesos in company-loans.
Loan Portfolio P$mn, NIM (right axis)
• At our target price, the stock might be trading at a 12.6x P/E 2018 y 2.0x P/BV.
200 5.6%
One of the most attractive valuations among Mexican Banks.
180
5.4%
Market data Multiples 2016 2017e 2018e 2019e 160
Last Price P$34.46 P/BV 2.1x 1.7x 1.5x 1.3x 140 5.2%
Target Price P$47.00 P/E 16.3x 10.9x 9.6x 9.0x 120
5.0%
Dividend Yield 1.98% ROE 13.9% 18.1% 16.6% 15.6% 100
Potential Return 36.4% ROA 1.33% 1.94% 1.96% 1.83% 80 4.8%
Market cap US$2,166m NPLs index 0.9% 1.0% 1.2% 1.2% 60
4.6%
Float 25.0% Coverage 181.2% 171.6% 143.2% 132.7% 40
20 4.4%
Shares 1,190m NIM 4.60% 5.49% 5.41% 5.25%
2014 2015 2016 2017 e 2018 e 2019 e

Loan portfolio NIM

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BIMBO (BUY, PT P$51.0)
Actinver Research
BIMBO Price Target 2018: $51.00
Target P/E f or 2018: 38.4x
• The largest Bakery company in the world.
• Our expectation with the addition of EBB is a higher profitbaility
• Company continue to turn its products on a healthier business-
line
• Mexican operation continues with a positive view due to the
electroal period.
• Our expectation calls for volume growth in the US operation
350,000 12.0%
during 2018.
300,000
• With the addition of EBB the European operation should return 250,000
11.0%

to the black figures. 200,000

10.0%
150,000

100,000
9.0%
50,000

0 8.0%
2016 2017e 2018e 2019e

Market Data Multiples 2017e 2018e 2019e Sales EBITDA Margin

Price P$43.45 EV/Revenue 3.8x 4.1x 3.6x

Target Price P$51.00 EV/EBITDA 9.4x 10.0x 9.0x
Dividend 0.24% P/E 23.2x 32.7x 23.3x
Return (e ) 17.6% ROE 16.7% 11.0% 13.5%
Market Cap US$10,768m ROA 3.9% 2.7% 3.8%
EV US$14,510m ROIC 18.2% 15.7% 16.8%
Float 20% ND/EBITDA 0.5x -0.3x 0.4x
Shares 4,704m Dividend 0.2% 0.2% 0.2%

9
CEMEX (BUY, PT P$20.0)
Actinver Research
CEMEX Price Target (2018): $20.00
Revenue Mix
2018 PE t o t arget 16.2x
Mexico,
• Favorable operating results trends in local currencies, reflecting 21% U.S.A.,
strict cost controls. 26%

• Leverage continues decreasing (3.98x including peso- Others, 2%

denominated perpetual notes) we expect that at the end of 2018
CX may achieve investment grade again.
SAC, 15%
Asia,
• Comfortable debt maturity profile with enough operating flexibility Middle
Europe,
East and
to meet debt commitments. Africa, 11%
24%

350 22%
• 70% of debt is USD-denominated, exposure will be offset by
300
higher cement prices. 20%
250
18%
• Attractive valuation with a 8.1x 2018E EV/EBITDA multiple. 200
16%
150
14%
100
Market Data Ratios 2017e 2018e 2019e 50 12%
Price P$15.00 EV/Revenue 1.8x 1.6x 1.5x
0 10%
Target Price P$20.00 EV/EBITDA 9.1x 8.1x 6.9x 2016 2017 E 2018E 2019E
Dividend 0.00% P/E 11.4x 12.1x 11.8x
Revenues EBITDA EBITDA margin
Return (e ) 33.3% ROE 10.0% 8.5% 7.7%
Market Cap US$11,842m ROA 3.6% 3.2% 3.2%
EV US$24,437m ROIC 13.0% 13.0% 13.6%
Float 95% ND/EBITDA 4.1x 3.7x 3.0x
Shares 15,107m Dividend 0.0% 0.0% 0.0%

10
FUNO (BUY, PT P$37.6)
Actinver Research
FUNO Price Target: $37.60 Revenues Breakdown
• Largest FIBRA in Mexico, with over 7.7 million sqm of gross By Currency By Asset Type
leasable area (GLA) and 500 properties.
• Among the strengths of FUNO we highlight its prime Retail
locations, quality of its assets and competitive rents, which 49%
altogether translate in high occupancy levels across its P$
segments (94% consolidated). 33%
• FUNO is at an inflection point because 61% of the CAPEX US$
for projects in development should begin generating 67%
revenue in the 4Q17; this is expected to add P$800 million Office Industrial
of NOI or P$0.21 / CBFI in the next 2 – 3 years. 25% 26%
• FUNO’s price still trades at a 25% discount to its current
NAV. Historically it has traded at a 20% premium.
• For 2020, we expect FFO /CBFI to reach P$2.78 (9.1%
yield), with most of the fully-stabilized projects (just Apollo Revenues And EBITDA
II’s development projects still under stabilization),
representing an 14% for the next 3 years.

Yields Current Portfolio

Period 3Q17 2017 2018

NOI Cap Rate (%) 7.0% 7.1% 7.9%

Adjusted Cap Rate (%) 6.6% 6.7% 7.4%
FFO Yield (%) 6.1% 6.3% 7.7%
Dividend Yield (%) 6.8% 6.5% 7.7%

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GMEXICO (BUY, PT P$70.0)
Actinver Research
GMEXICO Target Price 2018: $70.00 Revenue Distribution
P/E 2018 to Target: 9.5x Infrastruct
ure, 8%

• GMexico's 2018 EV/EBITDA fwd of 5.9x stands 24.0% below it's

five year average.
Transport,
• Despite the copper price volatility, we project a 2016-20 EBITDA 23%
CAGR of 11.4%.
SCCO,
60%
• SCCO - Gmexico's largest subsidiary - is one of the most effective
Asarco,
producers with a cash-cost of US$ 1.5/lb. 9%

• GMexico's Transportattion (GMXT) and Infrastructure divisions

represent an attractive source of diversification. 14 50%
12
10
8
40%
6
4
Market Data Ratios 2017 2018e 2019e 2
Price P$66.06 EV/Revenue 2.9x 2.8x 2.8x
0 30%
Target Price P$70.00 EV/EBITDA 6.3x 5.9x 5.9x 2016 2017e 2018e 2019e
Dividend 3.8% P/E 9.9x 8.9x 8.9x
Revenues EBITDA Margin
Return (e ) 6.0% ROE 18.3% 21.6% 20.7%
Market Cap US$25,704m ROA 8.1% 10.0% 10.0%
EV US$33,452m ROIC 5.4% 7.0% 7.0%
Float 48% ND/EBITDA 1.9x 1.9x 1.3x
Shares 7,785m Dividend 2.5% 3.3% 3.8%

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GRUMA (BUY, PT P$301.0)
Actinver Research
GRUMA Price Target (2018): $ 301.00
Target P/E f or 2018: 20.0x
• Worldwide leader in terms of flour and tortilla sales, its largest
markets are the U.S. and Mexico.
• Low leverage ratio, below 1x ND / EBITDA, although 94% of its
debt is USD-denominated.
• A total of 68% of its revenues are denominated in hard
currencies .
• Gruma has continuously improved its operating margins
throughout the last five years, the company still has room to
improve.
90,000 17.0%
• Gruma will benefit from MXN depreciation vs. the USD, although 80,000

currently the trend appreciation of the MXN has played against. 70,000 16.5%
60,000
50,000
16.0%
40,000
30,000
20,000 15.5%

Market Data Multiples 2017e 2018e 2019e 10,000

Price P$244.94 EV/Revenue 1.7x 1.5x 1.4x 0 15.0%

2016 2017e 2018e 2019e
Target Price P$301.00 EV/EBITDA 10.9x 9.2x 8.1x
Sales EBITDA Margin
Dividend 1.90% P/E 24.6x 16.3x 14.8x
Return (e ) 24.8% ROE 26.6% 27.4% 25.0%
Market Cap US$5,584m ROA 11.0% 11.3% 11.2%
EV US$5,904m ROIC 19.9% 19.7% 19.1%
Float 26% ND/EBITDA 1.6x 0.9x 0.4x
Shares 433m Dividend 1.7% 1.9% 2.0%

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MEXCHEM (BUY, PT P$61.8)
Actinver Research
MEXCHEM Target Price (2018): $61.80 Revenue Distribution
P/E 2018e: 20.6x Others,
. 11.0%
Brazil,
• The operational results should be favored by the cracker's cost 10.0% Europe,
reductions (confirmed in 2Q17) in addition to Netafim's integration. 32.2%

Colombia,
• Additionally, we believe significant catalyzers for this name include 10.1%
the revealing of Netafim's synergies, and its exposure to hard
currency (2016: 55.4% of total revenues).
USA., Mexico,
12.0%
• We project an 11.9% EBITDA CAGR, as Netafim is integrated and 20.5%
the aforementioned cost reductions.

• In terms of 2018 EV/EBITDA fwd, Mexichem's multiple stands 8 20%

29.9% below the 5-year average. 7
6
18%
5
4
Market Data Ratios 2017 2018e 2019e 3
16%
Price P$51.59 EV/Revenue 1.4x 1.3x 1.2x
2
Target Price P$61.80 EV/EBITDA 7.5x 7.0x 6.5x
1
Dividend ('18) 1.35 P/E 17.4x 17.2x 15.8x
0 14%
Return (e ) 22.4% ROE 8.0% 9.3% 9.3%
2016 2017e 2018e 2019e
Market Cap US$5,622m ROA 2.3% 2.8% 3.0%
Revenues EBITDA Margin
EV US$8,957m ND/EBITDA 3.2x 2.3x 2.1x
Float 48% Dividend 2.0% 2.6% 3.3%
Shares 2,100m

14
LIVERPOL (BUY, PT P$188.0)
Actinver Research
LIVEPOL Price Target (2018): $188.00 Revenue Distribution
Target P/E f or 2018: 25.2x
Services
• The department leader in Mexico will be benefited by the social Real and
Estate, 3% Others,
spectrum in Mexico, and its effect on consumption. 1%
Interests,
• Recent openings and new formats geared to the lower-middle 9%
and middle spectrum, which ensure faster growth.
• Loan portfolio management has been key to improving
profitability.
• Income exposed to FX is relatively lower, <20%. Merchandi
se, 87%
• Leverage of 1.5x net debt to EBITDA is conservative.
150 17%
• A third of its debt is denominated in foreign currency.
125
16%
100

75 15%

50
14%
Market Data Ratios 2015 2016e 2017e 25
Price P$125.76 EV/Revenue 1.6x 1.4x 1.2x
0 13%
Target Price P$188.00 EV/EBITDA 10.7x 9.4x 8.1x 2016 2017 2018 2019
Dividend 0.79% P/E 19.1x 16.8x 14.5x
Revenues EBITDA Margin
Return (e ) 50.5% ROE 10.8% 11.4% 11.9%
Market Cap US$8,892m ROA 5.8% 5.9% 6.3%
EV US$9,240m ROIC 12.3% 12.0% 12.2%
Float 15% ND/EBITDA 1.2x 0.8x 0.3x
Shares 1,342m Dividend 0.8% 0.8% 0.9%

15
SORIANA (BUY, PT P$55.0)
Actinver Research
SORIANA Price Target (2018): $ 55.00 Sals Floor Distribution
Target P/E f or 2018: 16.8x Bodega
Comercial Comercial, Alprecio,
• The most attractive choice in the sector in terms of valuation with Mexicana, 4% 0%
6%
the best perspective.
Mega, 13%
• Leverage is also the largest (2.3x ND / EBITDA), but manageable.
Soriana
• The challenge of the Comerci acquisition is matching and Hyper,
City Club, 46%
improving the performance of Comerci stores to Soriana's. 7%
Mercado
• The incorporation of Comerci will lead to accelerated growth and Express,
enhance operating profitability. 3%

• Leverage will decline in a fast way; zero debt will be achieved in a Mercado
Soriana, Soriana
5 year term. 14% Super, 6%
9%
160

120 9%

80
Market Data Ratios 2017e 2018e 2019e 8%
40
Price P$39.87 EV/Revenue 0.6x 0.5x 0.5x
Target Price P$55.00 EV/EBITDA 7.2x 6.2x 5.3x
0 8%
Dividend 0.00% P/E 15.1x 12.1x 10.1x
2016 2017e 2018e 2019e
Return (e ) 37.9% ROE 8.5% 9.7% 10.3%
Market Cap US$3,781m ROA 3.7% 4.4% 5.1% Sales EBITDA Margin

EV US$4,184m ROIC 12.1% 12.3% 12.7%

Float 14% ND/EBITDA 1.5x 1.0x 0.5x
Shares 1,800m Dividend 0.0% 0.0% 0.0%

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Actinver’s Favorites, 2020 Outlook — (Small and Medium Cap Companies)
AEROMEX (BUY, PT P$45.0)
Actinver Research
AEROMEXICO Target Price 2018: $45.00 Revenue Distribution
Other
P/E 2018 to Target: 29.6x
Cargo 6.0%
6.2%
• We support our positive view on AEROMEX due to the expected
Domestic
capacity expansion (ASKs: +3.6% per year in 2016-20), the 38.7%
projected increase for regional air-travel demand in the region
(RPKs: +4.5%), an expanding Cargo subdivision (2016-20 sales
CAGR: 12.5%) in addition to a more profitable fleet. Due to this,,
we calculate that total sales could reach P$71,717m by 2020, a International
7.4% annual growth rate 49.1%

• Additionally, we believe fuel consumption will decline 1.0%

80 30%
annually due to more efficient airplanes. We calculate a 10.5%
70
2016-20 EBIDTAR CAGR.
60
27%
• At 5.3x in terms of 2018 EV/EBITDAR fwd, Aeromexico’s 50
multiple lies 3.5% below its five-year average and 12.4% above 40
the peers’ mean vs. 46.0% in February 2017. 30
24%
20
Market Data Ratios 2017 2018e 2019e
10
Price P$29.17 EV/Revenue 1.4x 1.4x 1.4x
0 21%
Target Price P$45.00 EV/EBITDA 5.6x 5.3x 4.7x 2016 2017e 2018e 2019e
Dividend 0.0% P/E 34.4x 18.7x 8.1x
Revenues EBITDAR Margin
Return (e ) 54.3% ROE -3.0% 6.0% 9.4%
Market Cap US$20,786m ROA -0.5% 1.0% 1.6%
EV US$5,038m ROIC -3.0% 6.0% 9.4%
Float 55% ND/EBITDA 1.4x 1.4x 1.4x
Shares 713m Dividend 0.0% 0.0% 0.0%

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CADU (BUY, PT P$16.0)
Actinver Research
CADU Price Target (2018): $16.00
Revenue Mix
2018 PE t o t arget 7.1x
• CADU is the company with the highest operating margins in the
Mexican housing sector.
Others, 8%
AEL, 67%
• Average selling price will be the one with the highest growths
(18% CAGR in 2017-2020 vs. the industry average of 8%).

• CADU's leverage remains low, reflectin the company's strategy

focused on profitability. MI, 25%

• CADU trades below its Mexican peers in every single one, P/E
and EV/EBITDA. Furthermore, CADU’s ROE remains as one of the
highest in the housing sector. 7,000 24.5%
6,000
• Comparing EBITDA/House and Net Income/House, CADU is one 24.0%
5,000
of the companies with the highest profitability.
4,000 23.5%

3,000 23.0%
Market Data Ratios 2017e 2018e 2019e
2,000
Price P$14.92 EV/Revenue 1.4x 1.3x 1.1x 22.5%
Target Price P$16.00 EV/EBITDA 6.0x 5.4x 4.6x 1,000
Dividend 4.37% P/E 7.6x 6.7x 5.4x 0 22.0%
Return (e ) 11.6% ROE 17.1% 17.2% 18.0% 2016 2017E 2018E 2019E
Market Cap US$270m ROA 10.0% 10.1% 11.2% Rev EBITDA EBITDA Margin
EV US$340m ROIC 13.5% 14.1% 15.1%
Float 34% ND/EBITDA 1.2x 1.1x 1.0x
Shares 346m Dividend 4.4% 4.6% 5.3%

19
HCITY (BUY, PT P$31.8)
Actinver Research
HCITY Price Target 2020: $31.80 Revenues Breakdown
• HCITY is the largest limited service hotel chain in Mexico By Currency By Asset Type
with 130 hotels in operation through its own 5 brands US$
• The best positioned to take advantage of the accelerated
growth of Mexico’s lodging sector.
• A fully integrated and scalable business model that can
continue to generate efficiencies, resulting in a very low
point of equilibrium (~ 30% occupancy).
• A company with high profitable growth. We estimate a
+15% CAGR (2017-2020) at the EBITDA level. P$
100% Lodging
• Given HCITY’s low rental rates, the limited service segment 100%
is the most defensive in the sector.
• The high geographical diversification in strategic markets
gives greater stability to HCITY’s cash flow generation.
Revenues And EBITDA
• An experienced and institutional management with an
outstanding operating track record.

Yields Current Portfolio

Period 3Q17 2017 2018

EV/Adj. EBITDA (x) 13.5x 13.1x 11.7x

EBITDA Cap Rate (%) 7.2% 7.5% 8.4%
P/FFO (x) 14.2x 14.0x 12.6x
FFO Yield (%) 6.4% 6.4% 7.1%

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SPORT (BUY, PT P$24.0)
Actinver Research
SPORTS Price Target (2018): $ 24.00 Sales Breakdown
Target P/E f or 2018: 194.2x No core Core
5% 5%
• SPORTS is the leader in the Mexican Wellness market since Memberships
6%
2016 in terms of clubs.
Monthly Dues
• At the end of 2017, the company had 57 clubs, and 7 more 7%
openings are expected for 2018.
Sports
• In 2023 the company could reach 99 units if it continues to open 77%

7 clubs per year.

• Since the IPO (2010), the number of clubs increased 307%,
revenue grew 246%, EBITDA expanded 125% and clients
reached 85.4k (+242%).
2,500
• SPORTS trades at a 52% discount against its main peers in the 16.0%
2,000
U.S. market, in terms of EV/EBITDA 2017, adjusted by growth
and country risk. 1,500 14.0%

• We expect double-digit revenues and EBITDA growth for the 1,000

following 3 years. 500

12.0%

Market Data Multiples 2017e 2018e 2019e 0 10.0%

2016 2017e 2018e 2019e
Price P$17.97 EV/Revenue 1.2x 0.9x 0.8x
Sales EBITDA Margin
Target Price P$24.00 EV/EBITDA 7.5x 6.3x 5.0x
Dividend 0.00% P/E 59.8x 145.4x 59.9x
Return (e ) 33.6% ROE 1.9% 0.8% 1.3%
Market Cap US$75m ROA 1.3% 0.5% 0.9%
EV US$92m ROIC 15.9% 13.6% 12.9%
Float 26% ND/EBITDA 2.0x 1.4x 0.9x
Shares 79m Dividend 0.0% 0.0% 0.0%

21
VINTE (BUY, PT P$31.0)
Actinver Research
VINTE Price Target (2018): $31.00
Revenue Mix
2018 PE t o t arget 11.4x
AEL, 31%
• VINTE is the homebuilder with the highest ROE in the sector.

• Has one of the best average selling prices in the industry (33%
above its peers’).

• Attractive organic growth rates. EBITDA will have a 14% CAGR Residential
, 16%
during the 2017-2020 period.
MI, 53%
• Business model with high institutionalization and a clear
profitability-focused strategy.

• VINTE is the company with the highest profitability in EBITDA and 4,000 23.8%
Net Income by sold house, with P$156 thousand and P$96 3,500
23.6%
thousand, respectively. 3,000
23.4%
2,500
2,000 23.2%
Market Data Ratios 2017e 2018e 2019e 1,500
23.0%
Price P$25.89 EV/Revenue 1.9x 1.7x 1.5x 1,000
Target Price P$31.00 EV/EBITDA 8.3x 7.3x 6.2x 22.8%
500
Dividend 2.63% P/E 11.4x 9.5x 7.9x - 22.6%
Return (e ) 22.4% ROE 16.4% 16.9% 17.7% 2016 2017 E 2018E 2019E
Market Cap US$248m ROA 8.3% 8.8% 9.6% Revenues EBITDA EBITDA margin
EV US$295m ROIC 17.6% 16.2% 17.1%
Float 24% ND/EBITDA 1.3x 1.2x 1.0x
Shares 184m Dividend 3.4% 2.6% 3.1%

22
Directory Equity Research Team
Actinver phone number
55 1103-6600

Head of Equity Research| Retailing Carlos Hermosillo chermosillo@actinver.com.mx Ext. 4134

Analysts
Real Estate (property developers and Direct: 55 1103-6636
Pablo Duarte pduarte@actinver.com.mx
managers) Ext. 6636
Real Estate (property developers and
Juan Ponce jponce@actinver.com.mx Ext. 4105
managers)
Telcos & Media, Metals & Mining , Direct: 55 5268-0961
Pablo Abraham pabraham@actinver.com.mx
Transportation Ext. 0961

Capital Goods, Oil, Gas & Petrochemicals Alejandro Chavelas achavelas@actinver.com.mx Ext. 1791
Direct: 55 5268-0938
Cement & Construction Ramón Ortiz rortiz@actinver.com.mx
Ext. 0938

Financials Enrique Mendoza emendoza@actinver.com.mx Ext. 1693

Food & Beverage, Pulp, Paper & Others José Cebeira jcebeira@actinver.com.mx Ext. 1394

Technical Research Roberto Galvan rgalvan@actinver.com.mx Ext. 1837

Junior Analysts
Telcos & Media, Metals & Mining,
Alejandro Flores afloresb@actinver.com.mx Ext. 8967
Transportation

Financials Alejandra Montalvo amontalvo@actinver.com.mx Ext. 6641

Food & Beverage, Pulp, Paper & Others Jerónimo Cobián jcobian@actinver.com.mx Ext. 1193

Food & Beverage, Pulp, Paper & Others Carlos Arriola carriola@actinver.com.mx Ext. 1703
Disclaimer

Guide for recommendations on investment in the companies under coverage included or not, in the Mexican Stock Exchange main Price Index (S&P/BMV IPC)
Our recommendations are set based on an expected projected return which, as any estimate, cannot be guaranteed. Readers should be aware that a number of subjective elements have
also been taken into consideration in order to determine each analyst’s final decision on the recommendation. These include the specific risk profile, financial stance, pending corporate
actions, and the degree of certainty of the financial projections, among others.

Buy The stock’s total return is expected to exceed the total return of the IPC index within the target’s timeframe.
Hold The stock’s total return is expected to be in line with the total return of the IPC index within the target’s timeframe.
Sell The stock’s total return is expected to be below the total return of the IPC index within the target’s timeframe.

Important Statements

a) Of the Analysts:

“The analysts in charge of producing the Research Reports:

Pablo Abraham Peregrina; Carlos Arriola Aveleyra; José Antonio Cebeira González; Alejandro Chavelas Manzo; Jerónimo Cobián Rincón Gallardo; Enrique Covarrubias Jaramillo; Pablo Enrique
Duarte de León; Alejandro Flores Babatz; Ángel Galicia Díaz; Roberto Galván González; Carlos Hermosillo Bernal; Enrique López Navarro; Enrique Mendoza Farías; Alejandra Libia Montalvo
Ortuño; Ramón Ortiz Reyes; Juan Enrique Ponce Luiña; Roberto Ramírez Ramírez; Héctor Javier Reyes Argote; José Ramón de la Rosa declare”:

1) “All points of view about the issuers under coverage correspond exclusively to the responsible analyst and authentically reflect his vision. All recommendations made by analysts
are prepared independently of any institution, including the institution where the services are provided or companies belonging to the same financial or business group. The
compensation scheme is not based or related, directly or indirectly, with any specific recommendation and the remunerations only received from the entity which the analysts
provide their services”.

2) “None of the analysts with coverage of the issuers mentioned in this report holds any office, position or commission at issuer’s under his coverage, or any of the people who are
part of the Business Group or consortium to which they belong. They have neither held any position during the twelve months prior to the preparation of this report”.

3) “Recommendations on issuers, made by the analyst who covers them, are based on public information and there is no guarantee of their assertiveness regarding the
performance that is actually observed in the values object of the recommendation”

4) “Analysts maintain investments subject to their analysis reports on the following issuers”:

AC *, ALSEA *, AMX L, AZTECA *, CEMEX CPO, CMOCTEZ *, FINN 13, FUNO 11, GAP B, GRUMA B, LALA *, LIVEPOL C1, NEMAK *, PINFRA *, SPORT S, TERRA 13, VESTA *.
Disclaimer

Guide for recommendations on investment in the companies under coverage included or not, in the Mexican Stock Exchange main Price Index (S&P/BMV IPC)
Our recommendations are set based on an expected projected return which, as any estimate, cannot be guaranteed. Readers should be aware that a number of subjective elements have
also been taken into consideration in order to determine each analyst’s final decision on the recommendation. These include the specific risk profile, financial stance, pending corporate
actions, and the degree of certainty of the financial projections, among others.

Buy The stock’s total return is expected to exceed the total return of the IPC index within the target’s timeframe.
Hold The stock’s total return is expected to be in line with the total return of the IPC index within the target’s timeframe.
Sell The stock’s total return is expected to be below the total return of the IPC index within the target’s timeframe.

Important Statements

b) On Actinver Casa de Bolsa, S.A. de C.V. Grupo Financiero Actinver

1) Actinver Casa de Bolsa, S.A. de C.V. Grupo Financiero Actinver, under any circumstance shall ensure the sense of the recommendations contained in the reports of analysis to
ensure future business relationship.

2) All Actinver Casa de Bolsa, SA de C.V. Grupo Financiero Actinver business units can explore and do business with any company mentioned in documents of analysis. All
compensation for services given in the past or in the future, received by Actinver Casa de Bolsa, SA de C.V. Grupo Financiero Actinver by any company mentioned in this report has
not had and will not have any effect on the compensation paid to the analysts. However, just like any other employee of Actinver Group and its subsidiaries, the compensation being
enjoyed by our analysts will be affected by the profitability gained by Actinver Group and its subsidiaries.

3) At the end of each of the previous three months, Actinver Casa de Bolsa, SA de C.V. Actinver Financial Group, has not held any investments directly or indirectly in securities or
financial derivatives, whose underlying are Securities subject of the analysis reports, representing one percent or more of its portfolio of securities, investment portfolio, outstanding
of the Securities or the underlying value of the question, except for the following: aeromex*, bolsa a, ELEKTRA*, finn 13, fshop 13, GICSA b, MEXCHEM*, sport.

4) Certain directors and officers of Actinver Casa de Bolsa, SA de C.V. Grupo Financiero Actinver occupy a similar position at the following companies: AEROMEX, MASECA, AZTECA,
ALSEA, FINN, MAXCOM, SPORTS, FSHOP and FUNO.

The date set on the cover of this report is the date of distribution. This report shall be distributed among all clients who can meet the investor profile for the acquisition of the type of
values ​recommended in its content.

The concentration in each type of value in a contract by investor profile, is detailed in the following link: click here

To see our analyst’s change of recommendations click here.