equity research - banorte€¦ · kof soriana sport 29 30 amx femsa gicsa ienova lab mega tlevisa...

April 16, 2019 www.banorte.com @analisis_fundam

Manuel Jiménez Director Equity Research Telecommunications / Media [email protected]

Marissa Garza Equity Research – Conglomerates / Financials/ Mining / Petrochemicals [email protected]

José Espitia Equity Research – Airlines / Airports / Cement / Infrastructure / REITs [email protected]

Valentín Mendoza Equity Research – Auto Parts/ Consumer Discretionary / Real Estate / Retail [email protected]

Jorge Izquierdo Analyst [email protected]

This document is provided for the reader’s convenience only. The translation from the original Spanish version was made by Banorte’s staff. Discrepancies may possibly arise between the original document in Spanish and its English translation. For this reason, the original research paper in Spanish is the only official document. The Spanish version was released before the English translation. The original document entitled “Presión en márgenes y efectos de NIIF 16” was released on April 12, 2019. Document for distribution among public

Document for distribution among public

2019 is expected to kick-off with mild growth and lower operating

leverage. Hence, for the companies we have under coverage, we

estimate a 3.3% yoy revenue growth and 0.3% in EBITDA

The IFRS 16 accounting rules regarding leasing shall affectt the

comparability of figures -mainly in retail and transportation sectors-

increasing EBITDA, and the companies’ assets and liabilities

This quarter, the ten companies with the highest expected growth in

EBITDA are the following: Volar, Sport, Livepol, Chdraui, Lacomer,

Gmxt, Alsea, Pinfra, Gap and Oma

A less dynamic year-start. Revenue figures from the companies that we cover

are expected to begin 2019 with lower dynamism, in view of more moderate

economic growth and an adverse environment for commodity prices. Meanwhile,

lower operating leverage, certain pressures on costs and, in some cases,

consolidation effects of less profitable businesses, are expected to affect margins.

However, a more favorable FX effect would undermine pressures in margins,

boosting net profit similarly to revenue. Thus, our estimates assume a 3.3%

growth in revenue, 0.3% in EBITDA and 3.4% in net profit. It should be noted

that as of this quarter, the companies will begin to implement the IFRS 16

accounting standard, over leases, which would affect the comparability of figures,

because now, their value will be recognized in their balance sheets, increasing

assets and liabilities. Additionally, rental expenses will no longer be reported at

an operating level and are now being replaced by depreciation expenses and

declining interest accruals, which may affect the operating income, but would

benefit EBITDA. In terms of net income, higher financial expenses, given the

increase in liabilities from leasing and, in some cases, exchange volatility over

leases in other currencies, could affect net results. It should be mentioned that our

estimates do not reflect this accounting change; therefore the figures may vary

considerably.

Top ten companies with the highest estimated EBITDA growth in 1Q19 Chg % yoy

Revenue and EBITDA quarterly performance Chg % yoy

Stock Sector Revenue Ebitda Volar Transportation 18.8% 54.7% Sport Services 18.8% 27.8%

Liverpol Retail 9.7% 23.4%

Chdraui Retail 37.5% 17.2% Lacomer Retail 14.0% 17.1%

Gmxt Transportation 12.7% 15.7% Alsea Retail 23.9% 12.1%

Pinfra Infrastructure 28.4% 11.4% Gap Airports 11.8% 10.7% Oma Airports -4.2% 9.4%

Source: Banorte

3.6% 6.2%

11.0%

15.3%

10.5%

28.9%

5.5% 7.1% 3.3%

0.3%

0%

10%

20%

30%

40%

Revenue EBITDA1Q18 2Q18 3Q18 4Q18 1Q19e

PREVIEW 1Q19 Pressure on margins and the effects of IFRS 16

Equity Research Mexico

Earnings Calendar

The following chart pinpoints the dates on which some companies have

commented the possible release of their earnings releases. It is important to

mention that most of the companies report by the third week of the month,

marking Tuesday, April 30th as the deadline to do so.

Preview 1Q19 – Earnings Calendar by Company

April 2019

MONDAY TUESDAY WEDNESDAY THURSDAY FRIDAY

1 2 3 4 5

8 9 10 11 12

15 16 17 18 19

Holy Thursday Good Friday

22 23 24 25 26

FIHO

ALFA

ALPEK

ASUR*

AXTEL

GMEXICO*

GMXT*

LIVEPOL

NEMAK

AZTECA*

CREAL

GCC*

GENTERA

MEXCHEM

OMA

PINFRA*

CEMEX

GAP*

HOTEL

VOLAR

WALMEX

AC

KOF

SORIANA

SPORT

29 30

AMX

FEMSA

GICSA

IENOVA

LAB

MEGA

TLEVISA

ALSEA

BIMBO

CHDRAUI

LACOMER

Deadline

Source: Banorte, Bloomberg, Thomson Reuters, Infosel * Tentative

Estimates Summary

In the following chart we include the companies that we have under coverage and

which are part of the document herein. This quarter we have included FEMSA on

which we recently initiated coverage. Based on our estimates for 34 companies,

we expect nominal variations of 3.3% in sales and 0.3% in EBITDA. In the chart

below, we separate the estimates of 30 companies classified as Retail, Industrial

and Services, two from the financial sector and two others from the real estate

sector.

Quarterly Estimates for 1Q19MXN, million pesos

1Q18 1Q19e Var. % 1Q18 1Q19e Var. % 1Q18 1Q19e Var. % 1Q18 1Q19e Var. %

Alfa 85,850 87,578 2.0% 11,787 10,826 -8.2% 7,046 6,071 -13.8% 3,554 1,917 -46.1%

Alpek 28,746 30,241 5.2% 3,391 3,151 -7.1% 2,695 2,368 -12.1% 1,550 1,179 -23.9%

Alsea 11,012 13,644 23.9% 1,426 1,599 12.1% 672 749 11.4% 212 159 -24.8%

Amx 253,422 253,037 -0.2% 71,820 70,623 -1.7% 30,408 34,787 14.4% 18,087 18,369 1.6%

Asur 3,917 4,327 10.5% 2,670 2,675 0.2% 2,197 2,169 -1.3% 1,455 1,340 -7.9%

Axtel 3,753 3,197 -14.8% 1,379 1,084 -21.4% 343 186 -45.9% 960 -141 NA

Azteca 3,427 3,117 -9.0% 521 307 -41.2% 264 90 -66.1% 174 -413 NA

Cemex* 62,810 63,529 1.1% 9,938 9,695 -2.4% 6,204 5,704 -8.1% 482 1,902 294.4%

Chdraui 23,289 32,030 37.5% 1,594 1,867 17.2% 1,174 1,202 2.4% 573 648 13.1%

Femsa 115,337 121,096 5.0% 13,006 13,790 6.0% 8,412 8,778 4.4% 1,476 4,337 193.9%

Gap 3,408 3,811 11.8% 2,230 2,469 10.7% 1,845 2,035 10.3% 1,114 1,312 17.7%

Gcc* 3,533 3,376 -4.4% 859 784 -8.7% 473 429 -9.2% 212 199 -6.2%

Gmexico* 49,936 50,426 1.0% 23,574 23,419 -0.7% 18,115 17,754 -2.0% 6,776 6,905 1.9%

Gmxt 10,182 11,472 12.7% 4,196 4,857 15.7% 2,491 3,036 21.9% 1,866 1,604 -14.0%

Hotel 575 627 9.0% 226 217 -3.9% 171 161 -6.3% 152 70 -53.8%

Ienova* 5,390 6,473 20.1% 3,957 4,220 6.6% 2,809 2,910 3.6% 2,387 2,202 -7.7%

Kof 49,713 48,278 -2.9% 8,706 9,351 7.4% 5,883 6,154 4.6% 2,414 3,190 32.2%

Lab 3,025 3,177 5.0% 684 655 -4.3% 667 626 -6.2% 379 336 -11.2%

Lacomer 4,287 4,886 14.0% 369 432 17.1% 207 235 13.5% 172 199 15.7%

Livepol 25,262 27,716 9.7% 2,373 2,929 23.4% 1,547 1,984 28.2% 1,003 1,311 30.7%

Mega 4,695 5,132 9.3% 2,374 2,499 5.3% 1,613 1,688 4.6% 1,155 1,232 6.7%

Mexchem* 32,867 33,410 1.7% 6,173 5,658 -8.3% 4,243 3,640 -14.2% 1,480 1,532 3.5%

Nemak 23,163 21,323 -7.9% 3,695 3,100 -16.1% 2,032 1,323 -34.9% 1,287 753 -41.5%

Oma 1,932 1,852 -4.2% 1,072 1,173 9.4% 945 1,020 8.0% 608 691 13.6%

Pinfra 2,340 3,006 28.4% 1,686 1,878 11.4% 1,582 1,761 11.3% 876 985 12.4%

Soriana 35,487 35,112 -1.1% 2,505 2,349 -6.3% 1,751 1,554 -11.2% 817 633 -22.6%

Sport 450 535 18.8% 59 76 27.8% 9 21 126.5% -4 -1 NA

Tlevisa 22,812 23,291 2.1% 8,579 8,530 -0.6% 3,624 3,312 -8.6% 678 614 -9.5%

Volar** 5,850 6,951 18.8% 823 1,273 54.7% -906 -453 NA -1,118 -322 NA

Walmex 145,054 151,685 4.6% 14,378 15,193 5.7% 11,334 11,724 3.4% 8,349 8,625 3.3%

Subtotal 1,021,524 1,054,332 3.2% 206,050 206,678 0.3% 119,849 123,017 2.6% 59,123 61,368 3.8%

Cemex (US$) 3,381 3,308 -2.2% 535 505 -5.6% 334 297 -11.1% 26 99 281.5%

Gcc (US$) 189 176 -6.9% 46 41 -11.0% 25 22 -11.5% 11 10 -8.6%

Gmexico (US$) 2,668 2,625 -1.6% 1,259 1,219 -3.2% 968 924 -4.5% 362 359 -0.7%

Ienova (US$) 288 337 17.0% 211 220 3.9% 150 152 1.0% 128 115 -10.1%

Mexchem (US$) 1,756 1,739 -0.9% 330 295 -10.7% 227 190 -16.4% 79 80 0.9%

* Conversion of dollars to closing exchange rate. The company reports its f igure in dollars. ** In Volar the data is EBITDAR


GICSA 1,050 1,337 27.4% 934 901 -3.6% 890 885 -0.6% 410 224 -45.4%

FIHO 1,009 1,057 4.8% 314 294 -6.4% 368 346 -6.1% 175 95 -45.8%

Subtotal 2,058 2,395 16.3% 1,248 1,195 -4.3% 1,258 1,231 -2.2% 585 319 -45.5%


Creal 2,415 2,830 17.2% 1,570 1,770 12.7% 490 501 2.2% 423 464 9.8%

Gentera 5,016 5,457 8.8% 4,641 4,964 7.0% 1,050 1,110 5.7% 726 792 9.0%

Subtotal 7,430 8,287 11.5% 6,211 6,733 8.4% 1,540 1,611 4.6% 1,149 1,256 9.3%

Total 1,031,012 1,065,014 3.3% 207,298 207,873 0.3% 122,490 125,696 2.6% 60,857 62,943 3.4%

Source: Banorte, MSE.

EBITDA NOIRevenue Net Income

EBITDARevenue Operating Income Net Income

Interest Income Financial Margin Operating Income Net Income

Estimates by sector

In this section we present the stocks we have under coverage grouped by sectors.

With this information, we observe that the strongest reports in terms of EBITDA

are related to the Transportation, Infrastructure and Retail sectors. On the

negative side, weaker reports are expected in the Auto Parts, Industrials and

Petrochemicals sectors.

Revenue 1Q19e Ebitda 1Q19e

Operating Income 1Q19e Net Income 1Q19e

7.9%

-7.9%

2.6% 0.8%

8.4%

20.1% 28.4%

16.3% 11.5%

2.0% 1.0% 3.3%

13.3% 14.9%

-0.1%

-40%

-20%

0%

20%

40%

Airp

orts

Aut

o P

arts

Bev

erag

es

Cem

ent

Ret

ail

Ene

rgy

Infr

astr

uctu

re

Fib

ras/

Rea

l Est

ate

Fin

anci

als

Indu

stria

ls

Min

ing

Pet

roch

emic

als

Ser

vice

s

Tra

nspo

rtat

ion

Tel

ecom

mun

icat

ions

5.8%

-16.1%

6.6%

-2.9%

7.3% 6.6% 11.4%

-4.3% -8.2%

-0.7%

-7.9%

2.7%

22.1%

-1.9%

-20%

0%

20%

40%

Airp

orts

Aut

o P

arts

Bev

erag

es

Cem

ent

Ret

ail

Ene

rgy

Infr

astr

uctu

re

Fib

ras/

Rea

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ate

Indu

stria

ls

Min

ing

Pet

roch

emic

als

Ser

vice

s

Tra

nspo

rtat

ion

Tel

ecom

mun

icat

ions

4.5%

-8.1%

4.2% 3.6% 11.3%

-2.2%

4.6%

-13.8%

-2.0%

-13.4%

0.4%

63.0%

10.5%

-30%

20%

70%

Aut

o P

arts

Bev

erag

es

Cem

ent

Ret

ail

Ene

rgy

Infr

astr

uctu

re

Fib

ras/

Rea

l Est

ate

Fin

anci

als

Indu

stria

ls

Min

ing

Pet

roch

emic

als

Ser

vice

s

Tra

nspo

rtat

ion

Tel

ecom

mun

icat

ions

5.2%

-41.5%

93.5%

202.7%

3.5%

-7.7%

12.4%

-45.5%

9.3%

-46.1%

1.9%

-10.5%

-52.8%

71.5%

-6.6%

-70%

-20%

30%

80%

130%

180%

230%

Airp

orts

Aut

o P

arts

Bev

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es

Cem

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Ret

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Ene

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Infr

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Fib

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Fin

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Min

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Pet

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emic

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Ser

vice

s

Tra

nspo

rtat

ion

Tel

ecom

mun

icat

ions

Quarterly Estimates for 1Q19MXN, million pesos


Airports 9,256 9,989 7.9% 5,973 6,317 5.8% 4,988 5,225 4.8% 3,177 3,343 5.2%

Auto Parts 23,163 21,323 -7.9% 3,695 3,100 -16.1% 2,032 1,323 -34.9% 1,287 753 -41.5%

Beverages 165,050 169,374 2.6% 21,712 23,141 6.6% 14,295 14,932 4.5% 3,890 7,528 93.5%

Cement 66,344 66,905 0.8% 10,797 10,479 -2.9% 6,677 6,133 -8.1% 694 2,101 202.7%

Retail 247,417 268,250 8.4% 23,330 25,024 7.3% 17,352 18,073 4.2% 11,505 11,912 3.5%

Energy 5,390 6,473 20.1% 3,957 4,220 6.6% 2,809 2,910 3.6% 2,387 2,202 -7.7%

Infraestructure 2,340 3,006 28.4% 1,686 1,878 11.4% 1,582 1,761 11.3% 876 985 12.4%

Fibras/ Real Estate 2,058 2,395 16.3% 1,248 1,195 -4.3% 1,258 1,231 -2.2% 585 319 -45.5%

Financials 7,430 8,287 11.5% #DIV/0! 1,540 1,611 4.6% 1,149 1,256 9.3%

Industrials 85,850 87,578 2.0% 11,787 10,826 -8.2% 7,046 6,071 -13.8% 3,554 1,917 -46.1%

Mining 49,936 50,426 1.0% 23,574 23,419 -0.7% 18,115 17,754 -2.0% 6,776 6,905 1.9%

Petrochemicals 61,612 63,651 3.3% 9,564 8,809 -7.9% 6,937 6,008 -13.4% 3,029 2,711 -10.5%

Services 1,025 1,161 13.3% 285 293 2.7% 180 181 0.4% 147 70 -52.8%

Transportation 16,032 18,423 14.9% 5,019 6,129 22.1% 1,585 2,583 63.0% 748 1,282 71.5%

Telecommunications 288,109 287,773 -0.1% 84,673 83,042 -1.9% 36,252 40,063 10.5% 21,053 19,661 -6.6%

Total 1,031,012 1,065,014 3.3% 207,298 207,873 0.3% 122,647 125,859 2.6% 60,857 62,943 3.4%

Source: Banorte, MSE. Note: in Transportation we include GMXT and Volar. In the latter the figures are +EBITDAR

EBITDARevenue Operating Income Net Income

Companies Under Coverage

ALFA A Alfa

ALPEK A Alpek

ALSEA * Alsea

AMX L América Móvil

ASUR B Grupo Aeroportuario del Sureste

AXTEL CPO Axtel

CEMEX CPO Cemex

CHDRAUI Grupo Comercial Chedraui

CREAL * Crédito Real

FEMSA Fomento Económico Mexicano

FIHO 12 Fibra Hotel

GAP B Grupo Aeroportuario del Pacífico

GCC * Grupo Cementos de Chihuahua

GENTERA * Compartamos

GICSA B Grupo Gicsa

GMEXICO B Grupo México

GMXT * Grupo México Transportes

HOTEL * Grupo Hotelero Santa Fe

IENOVA * Infraestructura Energética Nova

KOF L Coca Cola Femsa

LAB B Genomma Lab Internacional

LACOMER UBC La Comer

LIVEPOL C1 El Puerto de Liverpool

MEGA CPO Megacable Holdings

MEXCHEM * Mexichem

NEMAK A Nemak

OMA B Grupo Aeroportuario del Centro del Norte

PINFRA * Promotora y Operadora de Infraestructura

SORIANA B Organización Soriana

SPORT S Grupo Sports World

TLEVISA CPO Grupo Televisa

VOLAR A Controladora Vuela Compañía de Aviación

WALMEX * Walmart de México y Centroamérica

http://www.bmv.com.mx/es/emisoras/perfil/-5720

http://www.bmv.com.mx/es/emisoras/perfil/-30023

ALFA A (Buy, PT2019 MXN$29.50)

Marissa Garza Ostos

ALFA – Preview 1Q19 MXN, million

Revenue & EBITDA Margin MXN, million

Concept 1Q18 1Q19e Chg %

Revenue 85,850 87,578 2.0%

Operating Income 7,046 6,071 -13.8%

Ebitda 11,787 10,826 -8.2%

Net Income 3,554 1,917 -46.1%

Margins

Operating Margin 8.2% 6.9% -1.3pp

EBITDA Margin 13.7% 12.4% -1.3pp

Net Margin 4.1% 2.2% -1.9pp

EPS $0.69 $0.37 -46.1%

Source: Banorte

Alfa, a weak quarter. The company is scheduled to report 1Q19

earnings on Tuesday, April 23rd, after the bell. We anticipate a

quarter with pressures in profitability in every subsidiary, except

Sigma. In this sense, in the consolidated balance, we expect a 2.0%

year-on-year increase in revenue , but an 8.2% decline in EBITDA,

to stand at MXN$87.5 billion and MXN$10.8 billion, respectively.

We expect MXN$1.9 billion in net income, down 46.1% year-on-

year given operating weakness and a less favorable FX effect, as

gains reported in 1Q18 were considerably higher than those

expected for 1Q19. We should remember that during the quarter,

the peso appreciated just 2.3% vs. 7.5% the previous year.

In Alpek, contribution from Suape and Citepe Petrochemical

operations should boost revenue and marginally offset expected

pressures amid a less favorable price context. The recovery

observed in the price of Brent crude this quarter vs the significant

decline seen by year-end 2018, will not be enough to completely

outweigh the effect of lower margins, particularly in the Polyester

segment, in view of global-wide normalization thereof (See Alpek’s

preliminary report).

In Nemak, we anticipate a quarter strongly affected by lower

aluminum prices and a drop in vehicle production in all regions.

Consequently, profitability will be affected given a lower operating

leverage (See Nemak’s preliminary).

In Axtel, the quarter should reflect downturns, resulting from the

sale of the residential fiber-to-the-home business (Massive

Business) in December. Excluding this effect, earnings will reflect

pressures in profitability derived from the slowdown in government

spending. (See Axtel’s preliminary report).

In Sigma, we expect a positive quarter, given a favorable price

environment.

Net Income & ROE

MXN, million

Net Debt & Net Debt to EBITDA

MXN, million

13.7% 14.0%

13.5%

19.0%

12.4%

0.0%

5.0%

10.0%

15.0%

20.0%

80,000

82,000

84,000

86,000

88,000

90,000

92,000

94,000

96,000

1Q18 2Q18 3Q18 4Q18 1Q19e

Revenue EBITDA Margin

-2.4%

0.9%

11.7%

17.9%

16.0%

-5.0%

0.0%

5.0%

10.0%

15.0%

20.0%

0

1,000

2,000

3,000

4,000

5,000

1Q18 2Q18 3Q18 4Q18 1Q19e

Net Income ROE

3.2x 3.3x

2.7x

2.4x

2.6x

0.0x

0.5x

1.0x

1.5x

2.0x

2.5x

3.0x

3.5x

115,000

120,000

125,000

130,000

135,000

140,000

145,000

1Q18 2Q18 3Q18 4Q18 1Q19e

Net Debt Net Debt to EBITDA

ALPEK A (Buy, PT2019 MXN$35.00)

Marissa Garza Ostos

ALPEK – Preview 1Q19 MXN, million



Revenue 28,746 30,241 5.2%


Ebitda 3,391 3,151 -7.1%

Net Income 1,550 1,179 -23.9%

Margins




EPS $0.73 $0.56 -23.9%

Source: Banorte

ALPEK, a weak quarter, yet already priced-into the stock.

Alpek is set to report 1Q19 earnings on Tuesday April 23rd, after

the closing bell. We anticipate weak figures, impacted by lower

prices of oil and commodities, although we believe this should

already be discounted in the price of the stock.

Margin pressures given a less favorable price context. For this

quarter, our estimates assume MXN$30.2 billion (US$1.5

billion,+19.2% yoy) in revenue and MXN$3.1 billion (US$164

million, -8.9% yoy) in EBITDA, representing a 5.2% rise and a

7.1% decline, respectively. Consequently, the consolidated

EBITDA margin should adjust by 140bps to levels of 10.4%. In

peso-terms, the conversion effect is marginally favorable,

considering a 1.8% average MXN depreciation yoy and taking into

account that company operations are dollarized.

The incorporation of Brazil will mitigate the downturn of the

Polyester segment. Although in 1Q19 the price of Brent crude

recovered from the considerable drop seen by year-end, this was not

enough to completely cancel out the effect of lower margins,

particularly in the Polyester segment, in view of global-wide

normalization thereof. However, we expect the contributions of the

Suape and Citepe Petrochemical operations in Brazil to help boost

revenue and marginally offset expected pressures amid a less

favorable price environment. In Plastics and Chemicals, we expect

margin stability in propylene and slight pressures on demand

following weak prices reported in the beginning of the year.

Ahead of news on the development of M&G México and the

sale conclusion of the co-generation plants. The most relevant

highlight this quarter will be news notes related to the restructuring

process in M&G México and confirmation that everything is set to

close the sale of the co-generation plants by 2Q19.

Net Income & ROE

MXN, million


MXN, million

11.8% 13.7% 14.1%

21.1%

10.4%

0.0%

5.0%

10.0%

15.0%

20.0%

25.0%

0

5,000

10,000

15,000

20,000

25,000

30,000

35,000

40,000

1Q18 2Q18 3Q18 4Q18 1Q19e


-21.3%

-11.9%

17.8%

35.8% 36.3%

-30.0%

-20.0%

-10.0%

0.0%

10.0%

20.0%

30.0%

40.0%

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

9,000

1Q18 2Q18 3Q18 4Q18 1Q19e

Net Income ROE

3.2x 3.1x

1.9x 1.8x 1.8x

0.0x

0.5x

1.0x

1.5x

2.0x

2.5x

3.0x

3.5x

0

5,000

10,000

15,000

20,000

25,000

30,000

35,000

40,000

1Q18 2Q18 3Q18 4Q18 1Q19e


ALSEA * (Hold, PT2019 MXN$ 60.00)

Valentín III Mendoza Balderas

ALSEA – Preview 1Q19 MXN, million pesos



Revenue 11,012 13,644 23.9%

Operating Income 672 749 11.4%

Ebitda 1,426 1,599 12.1%

Net Income 212 159 -24.8%

Margins




EPS $0.25 $0.19 -24.6%

Source: Banorte

This first quarter of the year would reflect the effects of the

acquisitions in Europe and the implementation of IFRS16.

Alsea is scheduled to report 1Q19 earnings on Tuesday, April 30th,

after market close. This would be the first quarter to incorporate the

effects from the acquisition of Grupo Vips in Spain and Starbucks

operations in France and Benelux. Furthermore, the implementation

of IFRS16 may affect the comparability of results vs. our estimates.

Grupo Vips and Starbucks Benelux would practically double

the company’s revenue in Europe, boosting TS 23.9% yoy. We

expect the acquisitions in Europe to translate into a 94.2% sales

increase in said region (MXN$4.8 billion), boosting consolidated

revenue 23.9% yoy to MXN$13.6 billion. Moreover, a 5.6% jump

in Mexico to MXN$6.3 billion, explained by a 2% LfL upturn and

the opening of 131 units in the L12M, should compensate the 1.7%

drop of such indicator in South America. (MXN$2.4 billion).

Lower profitability of acquired businesses would pressure the

consolidated EBITDA margin by 130bps. We expect Alsea’s

EBITDA to grow 12.1% yoy to total MXN$1.5 billion, below the

sales rhythm, which would result in a 130bps decline of the

corresponding margin to 11.7%, as we project new consolidations

in Europe would pressure the indicator of such region by 520bps to

14.8%. Hence, EBITDA would raise 43.8% yoy to MXN$715

million. In addition, we forecast a 5.8% EBITDA surge in Mexico,

to close at MXN$1.4 billion and a 9.1% drop in Latam to

MXN$304 million.

Higher interest payment would impact net profit. We anticipate

Alsea’s net income may reach MXN$159 million in 1Q19 (-24.8%

yoy), as a 76.5% higher Net Interest Expense, 26.9% from higher

interest payments (+54.4%e), would offset the positive effect of a

lower effective tax rate (33%e vs the previous 37.9%).

Net Income & ROE

MXN, million


MXN, million

13.0% 14.0% 13.7%

14.7%

11.7%

0.0%

2.0%

4.0%

6.0%

8.0%

10.0%

12.0%

14.0%

16.0%

0

2,000

4,000

6,000

8,000

10,000

12,000

14,000

16,000

1Q18 2Q18 3Q18 4Q18 1Q19e


11.3%

14.4% 15.3%

8.1% 7.1%

0.0%

2.0%

4.0%

6.0%

8.0%

10.0%

12.0%

14.0%

16.0%

18.0%

0

50

100

150

200

250

300

350

1Q18 2Q18 3Q18 4Q18 1Q19e

Net Income ROE

2.1x 2.1x 2.1x

3.7x 3.7x

0.0x

0.5x

1.0x

1.5x

2.0x

2.5x

3.0x

3.5x

4.0x

0

5,000

10,000

15,000

20,000

25,000

30,000

1Q18 2Q18 3Q18 4Q18 1Q19e


AMX L (Buy, PT2019 MXN$17.00)

Manuel Jiménez Zaldivar

AMX – Preview 1Q19 MXN, million



Revenue 253,422 253,037 -0.2%

Operating Income 30,408 34,787 14.4%

Ebitda 71,820 70,623 -1.7%

Net Income 18,087 18,369 1.6%

Margins

Operating Margin 12.0% 13.7% 1.7pp


Net Margin 7.1% 7.3% 0.1pp

EPS $0.27 $0.28 1.6%

Source: Banorte

Results reflect a negative FX conversion effect and the

acquisition in Guatemala. Based on our estimates, América

Móvil’s quarterly earnings will be neutral. In 1Q19, the company’s

numbers will reflect the acquisitions of Telefónica operations in

Guatemala for US$333 million. In this country, Telefónica had a

roughly 20% market share, that is to say, a 4.1 million mobile

subscriber base. Moreover, we anticipate the company’s earnings

will be negatively impacted by the fluctuation of Latin American

currencies against the U.S. dollar.

We expect a marginal variation in revenue. We forecast the

company will close the quarter with 364 Revenue Generating Units

(RGUs), up an annual 0.5% and equaling 4 million net additions

resulting mainly from the above-mentioned acquisition. During the

first quarter of the year, we expect AMX to report consolidated

revenue totaling MXN$253.0 billion, a -0.2% variation vs 1Q18.

Breaking down this item, we anticipate a 2.1% yoy drop in revenue

from services to MXN$210.7 billion due to a negative FX

conversion effect and greater competition that would impact

ARPU. In addition, we estimate a 11.1% increase in revenue from

equipment sales to MXN$42.2 billion, due to the migration of

subscribers towards value-added services and to lower subsidies on

equipment.

Slight pressure on profitability and higher financial expenses.

We forecast an annual 1.7% decline in EBITDA to MXN$70.6

billion, sending the corresponding margin to stand at 27.9%

(-40bps yoy). At a Net Interest Expense level, we expect a total of

MXN$5.9 billion, far exceeding the year-ago period’s MXN$913

million, derived from lower FX gains. Finally, we anticipate an

annual 1.6% net profit increase to MXN$18.3 billion, higher

financial expenses would be partially offset by a lower tax rate.

Net Income & ROE

MXN, million


MXN, million

28.3% 28.7% 29.1%

27.5% 27.9%

18%

20%

22%

24%

26%

28%

30%

175,000

200,000

225,000

250,000

275,000

1Q18 2Q18 3Q18 4Q18 1Q19e


6.1%

-1.2%

18.2%

26.9% 25.5%

-5.0%

0.0%

5.0%

10.0%

15.0%

20.0%

25.0%

30.0%

0

5,000

10,000

15,000

20,000

1Q18 2Q18 3Q18 4Q18 1Q19e

Net Income ROE

2.4x 2.4x

2.1x 2.0x 2.0x

1.0x

1.5x

2.0x

2.5x

3.0x

400,000

600,000

800,000

1Q18 2Q18 3Q18 4Q18 1Q19e


ASUR B (Buy, 2019 PT MXN$ 380.10)

José Itzamna Espitia Hernández

ASUR – Preview 1Q19 MXN, million



Revenue 3,917 4,327 10.5%


Ebitda 2,670 2,675 0.2%

Net Income 1,455 1,340 -7.9%

Margins


Ebitda Margin 68.2% 61.8% -6.3pp

Net Margin 37.1% 31.0% -6.2pp

EPS $4.85 $4.47 -7.9%

Source: Banorte

Operations in Puerto Rico and Colombia (Airplan) boost sales,

but EBITDA reports slight variation in the consolidated

balance. Asur will report a 10.5% increase in sales in 1Q19 (up

12.2% combining aeronautic and non-aeronautic revenue), and a

slight +0.2% variation in EBITDA, to close at MXN$4.3 billion

and MXN$2.7 billion, respectively. For the 9 airports operated by

the group in Mexico, we expect a surge of 7.8% and 8.1% in

operating revenue and EBITDA, respectively.

7.9% yoy increase in total passengers in the 16 airports

operated by the group. In 1Q19, total passenger traffic for Asur

rose 7.9% vs. 1Q18, including a 12.2% surge in domestic and a

2.3% increase in international traffic. The 9 airports operated by the

group in Mexico reported a low 2.4% passenger growth (due to an

adverse calendar effect from an Easter Week shift, from March in

2018 to April in 2019), while the Aeropuerto Luis Muñoz Marín in

San Juan, Puerto Rico (LMM), posted a sharp 23.8% upturn (solid

passenger recovery considering that the island was hit by Hurricane

Maria in September of 2017). Passengers in Colombia underwent a

solid 15.1% expansion, driven mainly by international (+16.5%)

yoy, followed by domestic traffic (+7.7%).

Drop in EBITDA margin yoy without accounting changes. We

forecast the operating margin will stand at 50.1%, and the EBITDA

margin will fall 6.3pp, to stand at 61.8%. The group’s margins,

without considering construction costs and revenue, would close as

follows: operating at 53.7% and EBITDA at 66.2% (-7.9pp). This

results from practically flat margins from operations in Mexico and

Puerto Rico, and lower profitability in Colombia, as well as from

greater weight from the consolidated balance of Puerto Rico and

Colombia, which have a lower margin vs. Mexico. We expect

majority net profit to drop 7.9% yoy.

Net Income & ROE

MXN, million

Net Debt & Net debt to EBITDA ratio

MXN, million

68.2%

60.7% 61.9% 62.7%

61.8%

56.0%

58.0%

60.0%

62.0%

64.0%

66.0%

68.0%

70.0%

3,200

3,400

3,600

3,800

4,000

4,200

4,400

1Q18 2Q18 3Q18 4Q18 1Q19e


21.8% 21.9% 21.1%

17.1% 16.2%

0.0%

5.0%

10.0%

15.0%

20.0%

25.0%

0

200

400

600

800

1,000

1,200

1,400

1,600

1Q18 2Q18 3Q18 4Q18 1Q19e

Net Income ROE

1.3x 1.4x

1.2x 1.1x

0.9x

0.0x

0.2x

0.4x

0.6x

0.8x

1.0x

1.2x

1.4x

1.6x

0

2,000

4,000

6,000

8,000

10,000

12,000

14,000

1Q18 2Q18 3Q18 4Q18 1Q19e


AXTEL CPO (Buy, PT2019 MXN$3.55)


AXTEL – Preview 1Q19 MXN, million



Revenue 3,753 3,197 -14.8%

Operating Income 343 186 -45.9%

Ebitda 1,379 1,084 -21.4%

Net Income 960 -141 N.A.

Margins



Net Margin 25.6% -4.4% -30.0pp

EPS $0.33 -$0.05 N.A.

Source: Banorte

Slowdown in revenue from government cut in

telecommunications spending. It should be mentioned that 1Q18

figures include operations from the residential fiber-to-the-home

business which was sold to Grupo Televisa by the end of 4Q18,

therefore, figures are not compared on an equal basis. With this,

Axtel has concentrated on the corporate segment, its core business.

During this quarter, we anticipate lower government spending in

telecommunications as a result of a new administration in office.

Mid-single digit increase in revenue within a comparable base.

In 1Q19, Axtel may report revenue totaling MXN$3.1 billion,

which would represent a 14.8% drop yoy. However, by excluding

massive segment revenue from the comparative base, consolidated

revenue would surge 5.2% yoy. The corporate segment would be

boosted by the dynamism of the network management and IT

solutions business. This segment would produce MXN$2.6 billion

in revenue (+6.7% yoy) contributing with 84% of total revenue. As

for Government revenue, we estimate a 2% dip due to lower

spending from federal and state government entities.

However, profitability drops. At an EBITDA level, we estimate

MXN$1.0 billion, representing a 21.4% decline and a 2.8pp

contraction in the corresponding margin to 33.9%. We anticipate

lower operating leverage due to the slowdown of government

spending. It is worth mentioning that in 1Q18, Axtel reported

MXN$122 million in net revenue from the sale of

telecommunications towers. Excluding such extraordinary revenue,

EBITDA would decrease 13.8% yoy.

Interests reflect leverage reduction. Although the comparative

base is difficult at a Net Interest Expense level due to the

MXN$942 million FX gain, in this first period we estimate a 14%

reduction in interest expense. In this context, in terms of net profit,

we estimate a MXN$141 million loss vs. a MXN$960 million gain.

Net Income & ROE

MXN, million


MXN, million

36.7% 36.8%

34.2%

31.8%

33.9%

30%

32%

34%

36%

38%

40%

2,500

3,000

3,500

4,000

1Q18 2Q18 3Q18 4Q18 1Q19e

Revenue EBITDA margin

0.1%

-42.6% -46.5%

30.2%

-0.2%

-60%

-50%

-40%

-30%

-20%

-10%

0%

10%

20%

30%

40%

(1,000)

(500)

0

500

1,000

1,500

1Q18 2Q18 3Q18 4Q18 1Q19e

Net Income ROE

3.3x

3.6x

3.5x

3.0x 3.1x

2.6x

2.8x

3.0x

3.2x

3.4x

3.6x

11,000

13,000

15,000

17,000

19,000

21,000

1Q18 2Q18 3Q18 4Q18 1Q19e

Net Debt Net Debt EBITDA

CEMEX CPO (Buy, 2019 PT MXN$ 12.70)


CEMEX – Preview 1Q19 USD, million



Revenue 3,381 3,308 -2.2%


Ebitda 535 505 -5.6%

Net Income 26 99 281.5%

Margins




EPS $0.00 $0.01 284.2%

Source: Banorte / Historic and estimated figures excluding IFRS 16.

We expect Cemex to report a drop in sales and EBITDA in

1Q19 yoy. We anticipate a decline of 2.2% yoy in sales (in dollars)

and 5.6% in EBITDA. Moreover, the company would surge

281.5% in majority net profit vs 1Q18.

We project volumes to report a slight set back in the

consolidated balance. We foresee an average growth in volume in

the U.S. (1.6%), Europe (2.5%), Asia, Middle East and Africa

(0.8%) and Central America, South America and the Caribbean

(1.2%). Conversely, we expect an average 3.3% decline in Mexico

derived from the market’s lower dynamism. It is worth mentioning

that volume in the U.S. was partially impacted by an adverse

climate, while in Europe, weather conditions improved in

comparison to 1Q18.

We estimate better prices yoy in local currency and increments

in dollars in most regions. Cemex’s efforts to improve its price

strategy continue; thus, we estimate price improvement in local

currency in all regions where the company is present. Along the

same line, we expect growth in dollars in most of the regions where

Cemex operates. We must remember that the exchange rate plays a

relevant role.

We forecast lower profitability in EBITDA. We estimate a 0.9pp

and 0.6pp downturn in operating margin and EBITDA to 9.0% and

15.3%, respectively. In addition to weaker sales, we believe energy

prices will continue to pressure the company’s costs. By region, we

expect the following expansion in EBITDA margin yoy: U.S.

(+0.2pp) and Europe (+0.2pp); on the other hand, we forecast the

following declines: Mexico (-1.3pp), Asia, Middle East and Africa

(-1.7pp), and Central America, South America and the Caribbean (-

0.5pp).

Majority net profit would total US$99 million (+281.5% yoy)

given lower comprehensive financing cost (-40%) which would

more than compensate the company’s loss in operating profit.

Net Income & ROE

MXN, million


MXN, million

15.8%

18.8% 18.8%

17.5% 15.3%

0.0%

5.0%

10.0%

15.0%

20.0%

56,000

58,000

60,000

62,000

64,000

66,000

68,000

70,000

72,000

74,000

76,000

1Q18 2Q18 3Q18 4Q18 1Q19e


5.2% 5.9%

5.0% 5.5%

6.3%

0.0%

1.0%

2.0%

3.0%

4.0%

5.0%

6.0%

7.0%

(2,000)

0

2,000

4,000

6,000

8,000

1Q18 2Q18 3Q18 4Q18 1Q19e

Net Income ROE

4.1x

4.2x

3.8x 3.8x

3.7x

3.4x

3.5x

3.6x

3.7x

3.8x

3.9x

4.0x

4.1x

4.2x

4.3x

165,000

170,000

175,000

180,000

185,000

190,000

195,000

200,000

205,000

1Q18 2Q18 3Q18 4Q18 1Q19e


CHDRAUI B (Buy, PT2019 $49.00)


CHDRAUI – Preview 1Q19 MXN, million pesos



Revenue 23,289 32,030 37.5%


Ebitda 1,594 1,867 17.2%

Net Income 573 648 13.1%

Margins




EPS $0.59 $0.67 13.1%

Source: Banorte

Positive year-start. Grupo Comercial Chedraui is scheduled to

report corresponding 1Q19 earnings on Tuesday, April 30th, after

the bell. We anticipate a good 2019 start, highlighting the

dynamism of SSS in Mexico, exceeding the performance of

Walmex. Meanwhile, although the consolidation of Fiesta Mart

would pressure margins, in such operations we should observe a

sequential improvement in profitability as a result of the first

synergies.

We expect consolidated revenue to grow 37.5%. We anticipate

that the consolidation of Fiesta Mart will give revenue a strong

push, in view of a 21.7% sales floor increase (+134.6% in the U.S.),

to which we would have to add a positive 260bps FX conversion

effect over the operations of Bodega Latina. Meanwhile, in Mexico,

we project that SSS would exceed the performance of Walmex by

growing 5.4% yoy, in El Super format we forecast a 2.5% rally and

in Fiesta, a 0.2% contraction. Hence, TS would reach MXN$32.0

billion (+37.5%) resulting from a 10.8% increase in Mexico

(MXN$18.3 billion), 107% in the U.S. (MXN$13.4 billion) and

2.2% in Real Estate.

The consolidation of Fiesta Mart would pressure the EBITDA

margin by 100bps. We expect CHEDRAUI’s EBITDA to grow

17.2% yoy to MXN$1.8 billion, resulting from a 10.7% rally in

such indicator in Mexico (MXN$1.2 billion) and a 10.1% increase

in that of the U.S. (MXN$422 million), while real estate would

contribute with MXN$167 million. Thus, the consolidated EBITDA

margin would fall 100bps to 5.8%, due to the Fiesta Mart

consolidation effect.

A lower tax effective rate would boost net profit. We project a

13.1% net income growth to MXN$648 million, supported by a

lower tax rate (30% vs the previous 34%), added to a practically flat

Net Interest Expense (-0.4%) – in view of MXN$2 million in FX

gains, which favorably compares to last year’s MXN$12 million

loss, offsetting a 29% increase in interest payments.

Net Income & ROE

MXN, million


MXN, million

6.8%

5.5% 5.6% 5.0%

5.8%

0.0%

1.0%

2.0%

3.0%

4.0%

5.0%

6.0%

7.0%

8.0%

0

5,000

10,000

15,000

20,000

25,000

30,000

35,000

40,000

1Q18 2Q18 3Q18 4Q18 1Q19e


7.7%

7.4% 7.3%

7.0% 7.0%

6.6%

6.8%

7.0%

7.2%

7.4%

7.6%

7.8%

0

100

200

300

400

500

600

700

1Q18 2Q18 3Q18 4Q18 1Q19e

Net Income ROE

0.5x

1.4x

1.2x 1.3x

1.2x

0.0x

0.2x

0.4x

0.6x

0.8x

1.0x

1.2x

1.4x

1.6x

0

2,000

4,000

6,000

8,000

10,000

1Q18 2Q18 3Q18 4Q18 1Q19e


CREAL * (Buy, PT2019 MXN$22.50) Marissa Garza Ostos

CREAL – Preview 1Q19 MXN, million

Interest Income & NIM MXN, million


Interest Income 2,415 2,830 17.2%

Financial Margin 1,570 1,770 12.7%


Net Income 423 464 9.8%

Margins

ROE 12.3% 13.0% 0.7pp

NIM 14.0% 13.1% 0.9pp

NPL 2.1% 1.8% -0.3pp

Provisions/TL 183.1% 159.0% -23.2pp

Source: Banorte

CREAL, maintains growth inertia. Crédito Real is scheduled to

release 1Q19 earnings on Wednesday April 24th after the bell. We

anticipate a positive quarter, where the strategy will continue to

focus on growth in Mexico and in the U.S.

SMEs, Payroll and Automobile Mexico will continue to boost

the portfolio. This quarter, we anticipate an annual 23.6% increase

in the total credit portfolio, to stand at roughly MXN$38.7 billion.

Such growth is explained mainly by the favorable performance in

SMEs with the launching of a new pure leasing product, Payroll

favored by greater origination, and Automobiles, driven primarily

by a sound growth in Mexico.

Financial Margin reflects perpetual bond accounting

adjustments. Growth in portfolio and adjustments related to

Instacredit commissions with the implementation of NIIF 9 (all

origination revenue and expenses must be integrated into the FM)

should boost financial revenue, which we anticipate will grow

17.2% yoy to reach MXN$2.8 billion. It should be noted that as of

July of 2018, perpetual bond interests are directly registered in

equity when the coupon is paid. Moreover, we expect a 25.6%

increase in financial expenses due to greater funding costs. Thus,

the Financial Margin should stand at MXN$1.7 billion, up an

annual 12.7%. As for provisions, these should rise 3.1% yoy to

MXN$434 million, with which we anticipate a Net Interest Margin

of 13.1% vs 14.0% in 1Q18.

Net profit to increase on a par with Margin. This quarter, we

expect MXN$464 million in net profit, which would represent a

9.8% yoy increase. Accordingly, we anticipate ROE at 13.0%, flat

vs. 4Q18, but should stand at levels of 1.8% considering the NPL

ratio (vs. 1.9 in 1Q18).

Net Income & ROE

MXN, million

Coverage Ratio & NPL

MXN, million

14.0% 14.5%

14.2%

16.6%

13.1%

0.0%

2.0%

4.0%

6.0%

8.0%

10.0%

12.0%

14.0%

16.0%

18.0%

2,200

2,300

2,400

2,500

2,600

2,700

2,800

2,900

1T18 2T18 3T18 4T18 1T19e

Interest Income NIM

12.3%

12.1%

12.7%

13.1%

13.0%

11.6%

11.8%

12.0%

12.2%

12.4%

12.6%

12.8%

13.0%

13.2%

0

100

200

300

400

500

600

1Q18 2Q18 3Q18 4Q18 1Q19e

Net Income ROE

1.9% 1.9% 2.1%

1.7% 1.8%

0.0%

0.5%

1.0%

1.5%

2.0%

2.5%

0%

50%

100%

150%

200%

1Q18 2Q18 3Q18 4Q18 1Q19e

Coverage ratio NPL

FEMSA (Hold, PT2019 MXN$192.00)


Valentín Mendoza Jorge Izquierdo

FEMSA – Preview 1Q19 MXN, million



Revenue 115,337 121,096 5.0%

Operating Income 8,412 8.778 4.4%

Ebitda 13,006 13,790 6.0%

Net Income 1,476 4,337 193.9%

Margins


EBITDA Margin 11.3% 11.4% 0.1pp


EPS $0.08 $0.24 193.9%

Source: Banorte

KOF would offset cost pressures incurred by FEMSA

Comercio. We anticipate a neutral report. Higher operating

expenses from FEMSA Comercio would be outweighed by the

positive deconsolidation effect of the Philippines in KOF.

FEMSA Comercio: solid growth in revenue. We expect revenue

from the proximity division to grow 10.4%, driven by a 5.5%

increase in same store sales and the opening of 190 new OXXO

locations. In the health division, revenue would gain 9% yoy

derived from a 5.4% increment in LfL sales and the opening of 62

pharmacies. Furthermore, revenue from the fuel division would

grow 17% yoy, driven by a 3.9% increase in the average price per

liter and the opening of 20 new stations. Finally, KOF’s revenue

would fall 2.9% yoy to MXN$48.2 billion.

Marginal improvement in profitability. We forecast a 5.3% yoy

increase in operating expenses given pressures of the FEMSA

Comercio division. These are explained by the change implemented

in the employment scheme, cash management and the opening of

new OXXO format stores, as well as by the pharmacy opening

effect in South America and the implementation of new vapor

recovery systems and the opening of OXXO GAS stations. Hence,

EBITDA from the proximity division would stand at MXN$3.2

billion (+2.8%) with a margin at 7.6%. Meanwhile the health

division would contribute with MXN$508 in EBITDA (-4.3%) and

a 3.7% margin. Finally, the fuel division would add MXN$190

million (+9%) with a 1.5% margin. However, the deconsolidation

of KOF operations in the Philippines would have a positive effect

on profitability by growing 6% yoy to MXN$13.7 billion.

Profit benefited by an FX effect and the participation in

Heineken. We expect FX losses to fall 89% yoy during 1Q19. In

addition, a higher contribution from FEMSA’s participation

(14.8%in Heineken would boost net earnings to MXN$4.3 billion.

Net Income & ROE

MXN, million


MXN, million

11.3%

12.6% 12.7%

14.5%

11.4%

8%

10%

12%

14%

16%

18%

100,000

105,000

110,000

115,000

120,000

125,000

130,000

1Q18 2Q18 3Q18 4Q18 1Q19e

Revenue EBITDA margin

17.3% 18.4%

6.9%

9.9% 10.9%

0%

5%

10%

15%

20%

0

2,000

4,000

6,000

8,000

10,000

12,000

1Q18 2Q18 3Q18 4Q18 1Q19e

Net Income ROE

0.9x

1.5x

1.4x

1.1x 1.0x

0.0x

0.5x

1.0x

1.5x

2.0x

25,000

35,000

45,000

55,000

65,000

75,000

1Q18 2Q18 3Q18 4Q18 1Q19e

Net Debt Net Debt EBITDA

FIHO12 (Hold, 2019 PT MXN$ 11.80)


FIHO – Preview 1Q19 MXN, million



Revenue 1,009 1,057 4.8%

NOI 368 346 -6.1%

Ebitda 314 294 -6.4%

Net Income 175 95 -45.8%

Margins

NOI Margin 36.5% 32.7% -3.8pp


Net Margin 17.4% 9.0% -8.4pp

Distribution payment $0.30 $0.27 -9.2%

Source: Banorte

Complicated beginning of the year impacts operating results. In

1Q19, we expect the REIT to report a 4.8% yoy increase in sales, a

6.1% drop in NOI and a 6.4% decline in EBITDA to close at

MXN$1.1 billion, MXN$346 million and MXN$294 million,

respectively. In addition, net profit would post a considerable

45.8% annual downturn.

More hotel rooms under operation and a higher rate would

more than offset a decline in occupancy, thus boosting revenue.

In 1Q19, the REIT would close with 3.1% more rooms vs. 1Q18.

Considering the total number of hotel rooms under operations and

under development, FIHO would close this quarter with a similar

number to that of the year-ago period. We estimate the REIT’s

stabilized hotel occupancy (74) to stand at 64.0% (-0.4pp).

Furthermore, we expect the average rate to stand at P$1,185,

whereby the effective rate would be P$758 (+1.3% vs. 1T18).

We foresee a drop in profitability. We expect the NOI’s margin

to stand at 32.7% and the EBITDA margin at 27.8%, representing

3.8pp and 3.3pp declines, respectively. The latter is due to a lower

operating leverage resulting from lower market demand, mainly in

beach destinations and, specifically for FIHO, in the Fiesta

Americana Condesa Cancún (FACC), as well as in business hotels

due to the current uncertain climate that affects projects and travel

plans.

We project a 45.8% net profit decline vs. 1Q18, which would

stand at MXN$95 million due to lower operating earnings and

higher comprehensive financing cost (+140.9% vs. 1Q18), mainly

resulting from higher paid interests (no longer capitalizing).

We forecast cash distribution to stand at MXN$ 0.268 per

CBFI, which would represent an approximate 2.8% yield based on

the current price level.

NOI & NOI Margin

MXN, million

AFFO / Distribution payment

MXN, million

31.1% 29.8%

25.6% 26.0%

27.8%

0.0%

5.0%

10.0%

15.0%

20.0%

25.0%

30.0%

35.0%

920

940

960

980

1,000

1,020

1,040

1,060

1,080

1,100

1Q18 2Q18 3Q18 4Q18 1Q19e


36.5%

34.9%

31.0%

32.2% 32.7%

28.0%

29.0%

30.0%

31.0%

32.0%

33.0%

34.0%

35.0%

36.0%

37.0%

0

50

100

150

200

250

300

350

400

1Q18 2Q18 3Q18 4Q18 1Q19e

NOI NOI Margin

0.295 0.290

0.207

0.262 0.268

0.000

0.050

0.100

0.150

0.200

0.250

0.300

0.350

0

50

100

150

200

250

300

1Q18 2Q18 3Q18 4Q18 1Q19e

AFFO Distribution payment

GAP B (Buy, 2019 PT MXN$ 206.70)


GAP – Preview 1Q19 MXN, million



Revenue 3,408 3,811 11.8%


Ebitda 2,230 2,469 10.7%

Net Income 1,114 1,312 17.7%

Margins



Net Margin 32.7% 34.4% 1.7pp

EPS $1.99 $2.34 17.7%

Source: Banorte

We expect Gap to continue to post double-digit growth in 1Q19.

We estimate the airport group to report 1Q19 earnings, including an

11.8% growth in sales and a 10.7% increase in EBITDA, to close at

MXN$3.8 billion and MXN$2.5 billion, respectively.

Mid single-digit passenger growth during the quarter. We

expect the sum of aeronautic and non-aeronautic revenue

(including MBJ) to total a 12.7% growth and considering only the

12 airports that operate in Mexico, such expansion is estimated at

12.0%. This would result from a 5.2% yoy total passenger traffic

increase, constituted by a 3.9% domestic and 6.7% international

traffic surge. Additionally, excluding MBJ (only the 12 airports that

operate in Mexico), total passengers climbed 4.4%. It should be

mentioned that there was an adverse calendar effect due to an

Easter Week shift this year, from March in 2018 to April in 2019.

We expect a slight increase in the group’s EBITDA margin

(without accounting changes). We anticipate the group will post

operating and EBITDA margin contractions of 0.8pp and 0.7pp to

stand at 53.4% and 64.8%, respectively. It must be stated that such

margins, without considering accounting changes (not representing

outflow), would come in as follows: 58.0% for operating (-1.3pp)

and 70.4% for EBITDA (-1.3pp). We expect profitability of the

airports that operate in Mexico to remain stable (+0.2pp in

EBITDA margin), as well as a lower margin for the MBJ Airport (-

14.0pp).

We project that as at 1Q19, Gap’s majority net profit would

total MXN$1.3 billion (+17.7% vs. 1Q18), due to increments in

operating earnings, lower taxes (-7%) and a less negative number

from FX conversion difference, partially offset by comprehensive

financing cost (vs. a gain in 1Q18).

Net Income & ROE

MXN, million

Net Debt & Net debt to EBITDA ratio

MXN, million

65.4%

62.3%

61.5% 60.6%

64.8%

58.0%

59.0%

60.0%

61.0%

62.0%

63.0%

64.0%

65.0%

66.0%

3,200

3,300

3,400

3,500

3,600

3,700

3,800

3,900

1Q18 2Q18 3Q18 4Q18 1Q19e


20.3%

27.0% 24.8% 23.8%

27.0%

0.0%

5.0%

10.0%

15.0%

20.0%

25.0%

30.0%

0

200

400

600

800

1,000

1,200

1,400

1,600

1Q18 2Q18 3Q18 4Q18 1Q19e

Net Income ROE

0.5x 0.6x

0.7x

0.8x

0.7x

0.0x

0.1x

0.2x

0.3x

0.4x

0.5x

0.6x

0.7x

0.8x

0.9x

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

1Q18 2Q18 3Q18 4Q18 1Q19e


GCC * (Buy 2019 PT MXN$ 124.50) José Itzamna Espitia Hernández

GCC – Preview 1Q19 USD, million

Revenue & EBITDA Margin USD, million


Revenue 189 176 -6.9%


Ebitda 46 41 -11.0%

Net Income 11 10 -8.6%

Margins




EPS $0.03 $0.03 -8.6%

Source: Banorte / Historic and estimated figures excluding IFRS 16.

We forecast setbacks in GCC’s 1Q19 earnings. In 1Q19, we

expect GCC to report a 6.9% decrease in sales (in dollars), as well

as an 11.0% drop in EBITDA, to come in at US$176 million and

US$41 million, respectively.

We expect a low-single digit volume decline, on average, in the

consolidated balance. In the U.S., adverse weather conditions

affected company volumes. In addition, the comparative base is

high, as 1Q18 was GCC’s all-time strongest performing quarter.

Hence, we forecast a mid-single digit drop in product volume. On

the other hand, for operations in Mexico, unlike the rest of the

country, we consider the favorable market dynamic in Chihuahua

had a positive effect on cement and concrete volumes. Thus, we

estimate an average +3.5% increase in volume.

Improved prices yoy in local currency and in U.S. dollars, on

average. GCC continues the implement its price strategy, which we

expect will be reflected on figures this quarter. We estimate a mid-

single digit improvement in product prices, on average, in local

currency and a low-single digit improvement in dollars.

Operating margin reduction. We forecast GCC will present a

0.7pp drop in operating margin, to stand at 12.7%, and a 1.1%

EBITDA margin contraction to 23.2%. This would result from

lower sales which would have a negative impact on the company’s

operating leverage.

We foresee an 8.6% yoy downturn in GCC’s majority net

profit, given lower operating profit, partially offset by lower

comprehensive financing cost (-12% yoy), as well as by lower taxes

(-11%). On the other hand, the company will continue to report

financial strength, with the Net Debt/EBITDA indicator at 1.6x vs.

1.6x in 4Q18.

Net Income & ROE

USD, million


USD, million

24.3%

29.9% 30.0% 27.9%

23.2%

0.0%

5.0%

10.0%

15.0%

20.0%

25.0%

30.0%

35.0%

0

50

100

150

200

250

300

1Q18 2Q18 3Q18 4Q18 1Q19e


9.7%

6.5% 7.3%

6.4% 6.1%

0.0%

2.0%

4.0%

6.0%

8.0%

10.0%

12.0%

(20)

(10)

0

10

20

30

40

50

1Q18 2Q18 3Q18 4Q18 1Q19e

Net Income ROE

1.8x 1.8x

1.6x 1.6x

1.6x

1.4x

1.5x

1.5x

1.6x

1.6x

1.7x

1.7x

1.8x

1.8x

1.9x

360

380

400

420

440

460

480

500

1Q18 2Q18 3Q18 4Q18 1Q19e


GENTERA * (Buy, PT2019 MXN$20.00)

Marissa Garza Ostos

GENTERA – Preview 1Q19 MXN, million

Interest Income & NIM MXN, million


Interest Income 5,016 5,457 8.8%

Financial Margin 4,641 4,964 7.0%


Net Income 726 792 9.0%

Margins

ROE 15.3% 16.0% 0.7pp

NIM 45.5% 38.2% -7.3pp

NPL 4.1% 2.9% -1.2pp

Provisions/TL 174.7% 214.5% 39.8pp

Source: Banorte

Gentera, a good year-start. The company is set to report 1Q19

earnings on Wednesday April 24th, after the bell. We anticipate a

favorable quarter, moving forward with the recovery momentum of

previous periods.

Gentera’s portfolio maintains double-digit growth. For this first

quarter of the year, we expect positive figures which should reflect

favorable dynamics that were implemented as well as the

company’s aggressive commercial strategy, especially to boost

growth in Mexico. In this sense, we expect Gentera’s total portfolio

to expand 12.9% yoy to stand at MXN$35.6 billion. In any case, it

should be mentioned that we anticipate a marginal qoq contraction,

not only resulting from the business’s cyclical nature, but also due

to an adverse calendar effect due to an Easter-week shift from

March in 2018 (1Q18) to April in 2019 (2Q19).

Financial Margin reflects rate-reduction strategy in order to

boost growth. Although growth in portfolio should boost financial

revenue, this will be tempered by a lower active rate, related to the

company’s strategy to boost growth, whereby we anticipate an

8.8% yoy increase in such item. This, coupled with higher interest

expenditures, resulting from a hike in Mexico’s reference rate and

higher liquidity levels, will reflect in a 7.0% Financial Margin

increase to MXN$4.9 billion. Growth of provisions below that of

the portfolio will translate into a Risk Adjusted Financial Margin of

MXN$4.2 billion, up 7.7% yoy. Consequently, the Net Interest

Margin (NIM) will go from 45.5% in 1Q18 and 40.7% in 4Q18 to

38.2% in 1Q19.

Net profit reflects a favorable strategy. The company’s operating

performance coupled with cost efficiencies will reflect on a

MXN$792 million net profit, posting a 9.0% yoy increase. ROE

should stand at 16.0% and the NPL ratio should erode slightly to

2.9% qoq.

Net Income & ROE

MXN, million

Coverage Ratio & NPL

MXN, million

45.5%

41.5%

44.6%

40.7%

38.2%

34.0%

36.0%

38.0%

40.0%

42.0%

44.0%

46.0%

48.0%

4,700

4,800

4,900

5,000

5,100

5,200

5,300

5,400

5,500

5,600

5,700

1Q18 2Q18 3Q18 4Q18 1Q19e

Interest Income NIM

15.3% 15.5%

15.0%

16.4%

16.0%

14.0%

14.5%

15.0%

15.5%

16.0%

16.5%

17.0%

640

660

680

700

720

740

760

780

800

820

840

1Q18 2Q18 3Q18 4Q18 1Q19e

Net Income ROE

4.1%

2.9% 2.6% 2.7% 2.9%

0.0%

0.5%

1.0%

1.5%

2.0%

2.5%

3.0%

3.5%

4.0%

4.5%

0%

50%

100%

150%

200%

250%

1Q18 2Q18 3Q18 4Q18 1Q19e

Coverage Ratio NPL

GICSA B (Buy, PT2019 MXN$9.00) Valentín III Mendoza Balderas

GICSA – Preview 1Q19 MXN, million pesos



Revenue 1,050 1,337 27.4%


Ebitda 934 901 -3.6%

Net Income 410 224 -45.4%

Margins



Net Margin 39.1% 16.7% -22.3pp

EPS $0.27 $0.15 -45.4%

Source: Banorte

Recent openings should begin to offset the effects from the

assets swap. GICSA is set to report 1Q19 earnings on Monday

April 29th, after the closing bell. We anticipate a quarter with

moderate declines, as recent openings should start to offset part of

the effects from the assets swap. However, said effect would also

pressure profitability given the lower occupancy.

GLA would grow 8.8% yoy. The recent openings of La Isla

Mérida, La Explanada Puebla, Paseo Querétaro and Masaryk 169

would add 68,316m2 to the company’s portfolio, therefore totaling

840,477m2 of GLA (+8.8%). Meanwhile, we expect occupation to

reach 91.2% for the stabilized portfolio and 82.8% in assets that are

under process of stabilization.

9.7% average rent and GLA increase would support a 27.4%

net revenue expansion. We expect net revenue to reach MXN$1.3

billion in 1Q19, up 27.4% from the year-ago period, due to a 9.7%

surge in average rent, explained by a 7% lease-spread and the

positive effect from the peso’s depreciation against the U.S. dollar

(260bps) of the company’s office space portfolio – which is

dollarized-, also adding an 8.8% increase in GLA.

We anticipate a low one-digit drop in NOI and EBITDA. We

expect Gicsa’s net operating income (NOI) to fall 0.6% yoy to

MXN$885 million, as the first contributions of recently opened

properties should partially offset the assets swap effect.

Furthermore, service companies are expected to subtract some

growth from the company’s EBITDA, thus reaching MXN$901

million during the first quarter of the year (-3.6% yoy).

Sharp interest expenses growth would pressure net income. We

anticipate net income to slump 45.4% to MXN$224 million, in

view of MXN$428 million in Net Interest Expense, which would

unfavorably compare to a MXN$164 million income in 1Q18.

Net Income & ROE

MXN, million


MXN, million

89.0% 88.1%

76.9%

56.5%

67.4%

0.0%

20.0%

40.0%

60.0%

80.0%

100.0%

0

500

1,000

1,500

2,000

2,500

1Q18 2Q18 3Q18 4Q18 1Q19e


0.9%

10.0%

3.2%

22.3% 20.2%

0.0%

5.0%

10.0%

15.0%

20.0%

25.0%

(2,000)

(1,000)

0

1,000

2,000

3,000

4,000

5,000

1Q18 2Q18 3Q18 4Q18 1Q19e

Net Income ROE

6.5x

4.8x 5.0x 5.4x 5.3x

0.0x

1.0x

2.0x

3.0x

4.0x

5.0x

6.0x

7.0x

20,000

20,200

20,400

20,600

20,800

21,000

21,200

21,400

21,600

21,800

1Q18 2Q18 3Q18 4Q18 1Q19e


GMEXICO B (Buy, PT2019 MXN$53.00)

Marissa Garza Ostos

GMEXICO – Preview 1Q19 USD, million



Revenue 2,668 2,625 -1.6%


Ebitda 1,259 1,219 -3.2%

Net Income 362 359 -0.7%

Margins



Net Margin 13.6% 13.7% 0.1pp

EPS $0.05 $0.05 -0.7%

Source: Banorte

GMEXICO, a neutral quarter. Grupo México will be releasing

1Q19 figures after April 23rd. The adverse comparative base for the

price of copper will be undermined by a significant recovery in

volumes. Hence, according to our projections model, we anticipate

a quarter where revenue may drop 1.6% and EBITDA, 3.2% yoy, in

dollars. Lower profitability in Mining operations, in view of lower

metal prices will be partially offset by higher margins of the

Transport division (GMXT). Thus, despite efficiencies in costs and

expenses that have been implemented, we expect a 0.8pp EBITDA

margin year-on-year contraction, to close at 46.4%. We expect

stable figures with US$359 million in net income (-0.7% yoy).

The new concentrator in Toquepala will begin to boost volumes.

This quarter, both the price of copper and that of by-products will

face an adverse annual comparative base. In 1Q19, the average

price of copper posted a year-on-year decline above 10%, going

from US$3.14 per pound in 1Q18 to US$2.80 in 1Q19. Moreover,

the price of silver fell a little over 6% yoy, while that of zinc

dropped nearly 21% yoy and molybdenum adjusted almost 30%

yoy. All the foregoing will be partially outweighed by growing

volumes, particularly in the case of copper, we anticipate a 10.0%

yoy increase mainly due to the operational start- up of the new

concentrator in Toquepala and higher volumes of by-products.

GMXT posts double-digit growth. The momentum of solid

earnings in the Transportation division will continue this quarter,

supported both by higher volumes and by prices in general. In

dollar-terms, we expect increments of 10.0% in revenue and 12.8%

in EBITDA yoy (See GMXT’s preliminary report).

Expected dividend of MXN$0.80 per share, similar to the

previous one and which represents a 1.5% return over current

prices.

Net Income & ROE

USD, million


USD, million

47.2%

49.4%

44.6% 45.2%

46.4%

42.0%

43.0%

44.0%

45.0%

46.0%

47.0%

48.0%

49.0%

50.0%

2,500

2,520

2,540

2,560

2,580

2,600

2,620

2,640

2,660

2,680

1Q18 2Q18 3Q18 4Q18 1Q19e


11.3%

11.9%

10.2% 10.0%

11.3%

8.5%

9.0%

9.5%

10.0%

10.5%

11.0%

11.5%

12.0%

12.5%

0

100

200

300

400

500

1Q18 2Q18 3Q18 4Q18 1Q19e

Net Income ROE

1.4x 1.3x 1.3x

1.4x

1.6x

0.0x

0.2x

0.4x

0.6x

0.8x

1.0x

1.2x

1.4x

1.6x

1.8x

6,000

6,500

7,000

7,500

8,000

1Q18 2Q18 3Q18 4Q18 1Q19e


GMXT * (Buy, PT2019 MXN$31.70)

Marissa Garza Ostos

GMXT – Preview 1Q19 MXN, million



Revenue 10,182 11,472 12.7%


Ebitda 4,196 4,857 15.7%

Net Income 1,866 1,604 -14.0%

Margins



Net Margin 18.3% 14.0% -4.3pp

EPS $0.45 $0.39 -14.0%

Source: Banorte

GMXT, a positive year-start. Grupo México Transportes is

scheduled to release its 1Q19 figures after April 23rd. We anticipate

another positive quarter, moving forward with the momentum of

organic growth and higher profitability.

Increase in volume continues mainly driven by the Energy,

Agriculture, Metal and Intermodal segments. According to our

estimates, this quarter we anticipate a 12.7% yoy increase in

consolidated revenue, to stand at MXN$11.4 billion. Such growth

will be fueled by a 5.0% increase in transported volume, measured

in tons/kilometers, being the Energy, Agriculture, Metals and

Intermodal segments those that present the most improvement.

Additionally, we expect considerable improvement, in annual

terms, on average consolidated prices per ton (+7.3% A/A),

although these will marginally drop on a sequential basis. (-0.6%

T/T).

Profitability improvement continues, driven by higher revenue

and especially by efficiencies obtained in view of ongoing

investments, the organizational restructuring of FEC (Florida East

Coast Railway) and the new plan to increase the subsidiary’s

productivity, at EBITDA level, we anticipate a 15.7% increase yoy

to MXN$4.8 billion. Consequently, the consolidated EBITDA

margin should expand 1.1pp to stand at 42.3%

Net profit hit by a less favorable FX effect. Despite the solid

operating performance, a less favorable qoq FX conversion effect

vs. the year-ago period would produce a 14.0% yoy drop in net

profit to close at MXN$1.6 billion.

Expected dividend of P$0.30 per share. We expect the company

to issue a dividend of P$0.30, similar to the previous one which

represents a 1.1% return over current prices.

Net Income & ROE

MXN, million


MXN, million

41.2%

44.4% 43.9%

41.8% 42.3%

39.0%

40.0%

41.0%

42.0%

43.0%

44.0%

45.0%

9,000

9,500

10,000

10,500

11,000

11,500

12,000

12,500

1Q18 2Q18 3Q18 4Q18 1Q19e


14.0%

13.2%

14.1%

13.7%

13.0%

12.4%

12.6%

12.8%

13.0%

13.2%

13.4%

13.6%

13.8%

14.0%

14.2%

1,450

1,500

1,550

1,600

1,650

1,700

1,750

1,800

1,850

1,900

1Q18 2Q18 3Q18 4Q18 1Q19e

Net Income ROE

1.4x

1.3x 1.3x 1.3x

1.2x

1.1x

1.2x

1.2x

1.3x

1.3x

1.4x

1.4x

1.5x

22,500

23,000

23,500

24,000

24,500

25,000

1Q18 2Q18 3Q18 4Q18 1Q19e


HOTEL * (Buy, 2019 PT MXN$ 10.00)


HOTEL – Preview 1Q19 MXN, million



Revenue 575 627 9.0%


Adjusted Ebitda 226 217 -3.9%

Net Income 152 70 -53.8%

Margins


Adjusted EBITDA Margin 39.2% 34.6% -4.6pp

Net Margin 26.3% 11.2% -15.2pp

EPS $0.31 $0.14 -53.8%

Source: Banorte

Weak 1Q19 report. We expect the company to report a 9.0% yoy

increase in sales, but a 6.3% and 3.9% decline in operating profit

and Adjusted EBITDA, to stand at MXN$627 million, MXN$161

million and MXN$217 million, respectively. We anticipate the

company’s majority net profit will drop 53.8%, to MXN$70

million.

An increase in the number of rooms yoy supports growth in

revenue which is partially offset by a lower effective rate. We

project a 2.4% downturn in occupation of self-owned rooms vs. the

year-ago period, standing at 66.3%. Moreover, we expect the

average daily rate in 1Q19 to be MXN$1,508 (+1.0% yoy). Thus,

we estimate the effective daily rate will post a 2.5% setback, to

MXN$627.

Ongoing inorganic growth. HOTEL sales are favored by a higher

number of self-owned rooms this quarter, +9.6% more vs. 1Q18.

The company has an interesting growth outlook and has the

resources to continue to integrate new assets to its portfolio.

We expect the company’s EBITDA margin to post a yoy

reduction. We forecast a 4.2pp profit margin drop to stand at

25.6%. Along the same line, we project Hotel’s Adjusted EBITDA

margin will report a 4.6pp reduction, coming in at 34.6%. The latter

would be explained by lower operating leverage due to several

elements that had an adverse effect during the quarter, such as: a

difficult comparative base, including Easter week in 1Q18, which

this year falls in April, a slowdown in tourism due to safety

concerns, lower demand of urban hotels (current uncertainty) and a

longer than expected wait time for Reflect hotels to mature.

We project MXN$70 million in majority net profit, down

53.8% from 1Q18, due to lower operating profit and a

comprehensive financing cost, in comparison to a gain in 1Q18,

from lower FX profits.

Net Income & ROE

MXN, million


MXN, million

39.2%

28.2% 30.3% 31.9%

34.6%

0.0%

5.0%

10.0%

15.0%

20.0%

25.0%

30.0%

35.0%

40.0%

45.0%

0

100

200

300

400

500

600

700

1Q18 2Q18 3Q18 4Q18 1Q19e


4.9%

3.0%

3.9%

5.8%

4.2%

0.0%

1.0%

2.0%

3.0%

4.0%

5.0%

6.0%

7.0%

(50)

0

50

100

150

200

1Q18 2Q18 3Q18 4Q18 1Q19e

Net Income ROE

3.2x 3.4x 3.5x

4.1x

3.5x

0.0x

0.5x

1.0x

1.5x

2.0x

2.5x

3.0x

3.5x

4.0x

4.5x

0

500

1,000

1,500

2,000

2,500

3,000

1Q18 2Q18 3Q18 4Q18 1Q19e


IENOVA * (Buy, PT2019 MXN$92.80)

Marissa Garza Ostos

IENOVA – Preview 1Q19 USD, million



Revenue 288 337 17.0%


Ebitda 211 220 3.9%

Net Income 128 115 -10.1%

Margins



Net Margin 44.3% 34.0% -10.3pp

EPS $0.11 $0.10 -10.1%

Source: Banorte

Ienova, a neutral quarter. The company is set to release 1Q19

earnings on Monday April 29th, after market close. According to

our estimates, Ienova should start the year with modest growth in

Adjusted EBITDA. This quarter, the main catalyst will be the solid

performance of the Thermoelectric plant in Mexicali (whose

operations were once again integrated as of 2Q18) and the

beginning of operations of the Prima and Rumorosa Solar projects.

We will closely monitor comments related to possible contract

reviews with the CFE and any progress on pending projects such as

the sea-bed pipeline (Texas-Tuxpan) expected to begin operations

in 2Q19.

Sustained growth supported by solid base contracts. According

to our estimates, we anticipate a 17.0% yoy increase in the

company’s consolidated revenue to reach US$337 million and a

3.9% expansion in adjusted EBITDA to stand at US$220 million.

The latter results from higher sales volume, mitigated by lower

natural gas prices.

Gas Segment. In this segment, we expect a neutral quarter, where

lower natural gas prices and some adjustments in Ecogas will

impact growth. Accordingly, we expect US$145 million in

EBITDA, practically stable vs. 1Q18.

Electricity Segment. Higher sales volumes from the

Thermoelectric plant in Mexicali, coupled with the incorporation of

the Prima and Rumorosa Solar projects will reflect in US$35

million worth of EBITDA (+137.6% yoy).

Net profit boosted by lower taxes. The favorable operating

performance will be partially offset by a less favorable yoy FX

effect. Accordingly, the company’s net profit should fall 10.1% to

US$115 million.

Net Income & ROE

USD, million


USD, million

73.4% 71.2%

58.4% 60.1% 65.2%

0.0%

10.0%

20.0%

30.0%

40.0%

50.0%

60.0%

70.0%

80.0%

0

50

100

150

200

250

300

350

400

450

1Q18 2Q18 3Q18 4Q18 1Q19e

Revenue Adjusted EBITDA Margin

7.2%

8.2% 8.1%

9.1% 8.6%

0.0%

2.0%

4.0%

6.0%

8.0%

10.0%

0

20

40

60

80

100

120

140

1Q18 2Q18 3Q18 4Q18 1Q19e

Net Income ROE

3.6x

3.4x

3.5x 3.5x

3.9x

3.1x

3.2x

3.3x

3.4x

3.5x

3.6x

3.7x

3.8x

3.9x

0

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

1Q18 2Q18 3Q18 4Q18 1Q19e


KOF L (Hold, PT2019 MXN$137.00)

Manuel Jimenez Zaldivar

Jorge Izquierdo

KOF – Preview 1Q19 MXN, million



Revenue 49,713 48,278 -2.9%


Ebitda 8,706 9,351 7.4%

Net Income 2,414 3,190 32.2%

Margins




EPS $1.15 $1.52 32.2%

Source: Banorte

Solid beginning of the year for KOF. We anticipate a positive

report. The deconsolidation effect from operations in the

Philippines would offset a drop in volume in Colombia, due to the

new valued added tax imposed on the production chain of sugary

beverages and beer in said country, as well as to macroeconomic

conditions in Argentina.

In this context, we assume a 2.9% yoy revenue reduction and a

7.4% year-on-year EBITDA increment. It should be mentioned that

our figures do not incorporate the recently announced changes in

IFRS 16 and data released by the company could vary significantly.

In a comparable base, we anticipate solid growth. By re

expressing 2018 figures excluding the results from the Philippines,

revenue and EBITDA would be growing 9.4% and 14.5%,

respectively. Moreover, we expect increments in average prices in

line with inflation and year-on-year volume growth in Mexico and

Central America (+2.7%) and Brazil (+1.7%). Furthermore, we

anticipate an increase of roughly 5% on the average price per unit

case in Colombia to face an estimated 4.7% volume drop. Finally,

we expect volume in Argentina to fall 14% yoy.

Improvement in profitability. In a comparable base, we expect

the margin to post an 86bp expansion to 19.4% in 1Q19. This as a

result of the termination of the operations in the Philippines,

efficiencies in hedging main raw materials and a more favorable

environment for the price of sugar at an international level.

Net profit benefited by lower interest payments. During 4Q18,

the leverage level dropped. Due to the latter, we expect interest

payments to fall nearly 15% yoy in 1Q19. In this sense, net profit

would increase 32% to stand at MXN$3.1 billion.

Net Income & ROE

MXN, million


MXN, million

17.5% 18.3%

19.2% 20.4%

19.4%

15%

17%

19%

21%

23%

25%

40,000

42,000

44,000

46,000

48,000

50,000

52,000

54,000

1Q18 2Q18 3Q18 4Q18 1Q19


-14.6% -13.7% -13.7%

11.2% 11.5%

-18.0%

-13.0%

-8.0%

-3.0%

2.0%

7.0%

12.0%

0

1,000

2,000

3,000

4,000

5,000

6,000

1Q18 2Q18 3Q18 4Q18 1Q19

Net Income ROE

1.6x

1.8x

1.9x

1.6x

1.5x

1.2x

1.3x

1.4x

1.5x

1.6x

1.7x

1.8x

1.9x

2.0x

0

10,000

20,000

30,000

40,000

50,000

60,000

70,000

80,000

1Q18 2Q18 3Q18 4Q18 1Q19


LAB B (Hold, 2019 PT MXN$ 15.50)


LAB – Preview 1Q19 MXN, million pesos



Revenue 3,025 3,177 5.0%


Ebitda 684 655 -4.3%

Net Income 379 336 -11.2%

Margins



Net Margin 12.5% 10.6% -1.9pp

EPS $0.36 $0.32 -11.2%

Source: Banorte

Investments in advertising to boost sales should put pressure on

margins. Lab is scheduled to report 1Q19 earnings on Monday

April 29th after the closing bell. We anticipate that higher

advertising expenses would support revenue growth but would, in

turn, pressure profitability.

Sales would grow 5.0% by year-start. We expect consolidated

revenue to come in at MXN$3.2 billion in 1Q19 (+5.0% yoy). Such

performance would be explained by a 3.8% rally in Mexico, in

view of 3.5% and 4.2% increments in OTC and PC, respectively,

anticipating that higher spending in advertising would have

streamlined the sell-out and made room for sell-in growth. In

addition, a 12.2% OTC expansion in Latin America would offset a

1.3% contraction in personal care products in said region. Thus,

such consolidated indicator would advance 3.9% yoy. Finally, in

the U.S., we consider the double-digit growth dynamic could

continue, which coupled with an increase in points of sale and a

260bps favorable FX conversion effect would result in TS

escalating 13%, due to a 13.2% gain in OTC and a 12.8%

expansion in PC.

Advertising expenses would undermine the EBITDA margin by

200bps. In line with the strategy implemented as of 4Q18, we

expect higher investments in advertising with the purpose of

boosting sell-out would increase the expense to sales ratio by 2pp.

Hence, these would grow by double-digits year-on-year (10.3%),

eroding the EBITDA margin by 200bps to stand at 20.6% and

translate into a 4.3% yoy EBITDA reduction for LAB to MXN$655

million.

Higher tax effective rate would impact the company’s net

profit. We expect Lab’s net income to drop 11.2% to MXN$336

million, as a higher tax effective rate (30%E vs a previous 24.1%)

would offset a 12.4% lower Net Interest Expense related to lower

FX losses in comparison to 1Q18.

Net Income & ROE

MXN, million


MXN, million

22.6% 20.6% 20.6%

18.5% 20.6%

0.0%

5.0%

10.0%

15.0%

20.0%

25.0%

2,900

2,950

3,000

3,050

3,100

3,150

3,200

1Q18 2Q18 3Q18 4Q18 1Q19e


16.9% 16.2% 16.2% 16.4%

13.0%

0.0%

2.0%

4.0%

6.0%

8.0%

10.0%

12.0%

14.0%

16.0%

18.0%

0

50

100

150

200

250

300

350

400

1Q18 2Q18 3Q18 4Q18 1Q19e

Net Income ROE

1.4x 1.4x

1.6x 1.8x 1.8x

0.0x

0.5x

1.0x

1.5x

2.0x

0

1,000

2,000

3,000

4,000

5,000

1Q18 2Q18 3Q18 4Q18 1Q19e


LACOMER UBC (Buy, PT2019 MXN$ 25.00)


LACOMER – Preview 1Q19 MXN, million pesos



Revenue 4,287 4,886 14.0%


Ebitda 369 432 17.1%

Net Income 172 199 15.7%

Margins




EPS $0.16 $0.18 15.7%

Source: Banorte

Ongoing profitability improvement La Comer is set to report

1Q19 earnings on Tuesday, April 30th, after the bell. During the

quarter, we expect dynamism in revenue to continue, coupled with

the most aggressive SSS and sales floor increments within the retail

sector in Mexico (5.5% and 12.0%, respectively). Meanwhile, in

terms of profitability, a more favorable sales mix should offset an

increase in expenses resulting from higher electricity prices and

pre-operating expenses.

We continue to expect the best LfL growth within the retail

sector. We project La Comer’s SSS may report a 5.5% yoy

increase in 1Q19, once again topping Chedraui (5.4%e), Walmex

(5.1%) and Soriana (+1.3%e). Meanwhile, a 12% yoy sales floor

expansion, following the opening of 5 new locations during the last

year, may boost total sales +14.0% year-on-year to MXN$4.9

billion.

Despite pressures from higher electricity costs and pre-

operating expenses, the company’s EBITDA margin could

expand 20bps. We project that a more favorable sales mix may

boost the gross margin by 50bps to 27.6%, thanks to a greater

contribution from Fresko and City Market towards consolidated

sales. This, in turn, should outweigh certain pressures on expenses

(+17.9%) in view of higher electricity prices and some pre-

operating expenditures due to the opening of new units. Thus,

EBITDA would grow 17.1% yoy to MXN$432 million, thereby

translating into a 20bps EBITDA margin expansion to 8.8%.

Net profit could grow 15.7% yoy. We expect La Comer’s net

income to reach MXN$199 million in 1Q19, increasing 15.7% over

the year-ago period. In addition to operating growth, a 94.7%

higher Net Interest Income, resulting from greater interest income

and lower FX losses, should offset a higher tax effective rate (30%e

vs a previous 25.9%)..

Net Income & ROE

MXN, million


MXN, million

8.6% 8.1%

12.6%

7.3%

8.8%

0.0%

2.0%

4.0%

6.0%

8.0%

10.0%

12.0%

14.0%

3,800

4,000

4,200

4,400

4,600

4,800

5,000

5,200

1Q18 2Q18 3Q18 4Q18 1Q19e


4.1% 4.2%

5.0% 5.0% 4.9%

0.0%

1.0%

2.0%

3.0%

4.0%

5.0%

6.0%

0

50

100

150

200

250

300

350

400

450

1Q18 2Q18 3Q18 4Q18 1Q19e

Net Income ROE

-1.6x

-1.8x

-1.4x -1.5x

-1.7x

-2.0x

-1.5x

-1.0x

-0.5x

0.0x

(3,500)

(3,000)

(2,500)

(2,000)

(1,500)

(1,000)

(500)

0

1Q18 2Q18 3Q18 4Q18 1Q19e


LIVEPOL C (Hold, PT2019 MXN$ 151.00)


LIVEPTL – Preview 1Q19 MXN, million pesos



Revenue 25,262 27,716 9.7%


Ebitda 2,373 2,929 23.4%

Net Income 1,003 1,311 30.7%

Margins




EPS $0.75 $0.98 30.7%

Source: Banorte

Solid growth and improved profitability given an easy

comparative base. Liverpool is set to report 1Q19 earnings on

Tuesday April 23rd, after the closing bell. We anticipate a quarter

with double-digit growth in EBITDA and net profit, facing an easy

comparative base as a result of several extraordinary charges

reported in 1Q18, which hit profitability.

Revenue would grow 9.7% yoy. We expect Liverpool’s

consolidated revenue to reach MXN$27.7 billion in 1Q19 (+9.7%

yoy), explained by a 7.8% surge in Liverpool and FdF sales

(SSS+6.6%e), in addition to a 12.4% increment in Suburbia sales

(SSS +8.4%e) and a 15.5% increase in interest income, given a

6.7% portfolio upturn due to the launching of the Suburbia credit

card. Furthermore, we expect revenue from rent to grow 14.1%,

thanks to GLA expansions in Perisur and Satélite. Finally, other

revenue and services would add MXN$219 million.

Double-digit EBITDA growth. We project that revenue growth

from the financial business should change Liverpool’s sales mix

towards a more favorable combination, boosting the gross margin

by 90bps to 41.8%. Meanwhile, the absence of extraordinary

charges- like those acknowledged in 1Q19-, coupled with a 0.1pp

yoy lower NPL rate (5%e), should offset the effect of pre-operating

expenses from the 13 department stores that were opened in the

LTM. Hence, we estimate expenses will grow practically in line

with sales (9.9%e), translating into a 23.4% EBITDA increase to

MXN$2.9 billion and a 120bps EBITDA margin expansion to

10.6%.

Sharp net income growth. We consider that a 20.3% lower Net

Interest Expense- from 8.7% lower interest payments- would

compensate a higher tax rate (27%e vs a previous 19.4%),

bolstering the company’s net profit by 30.7% to MXN$1.3 billion.

Net Income & ROE

MXN, million


MXN, million

9.4%

14.9% 12.7%

19.2%

10.6%

0.0%

5.0%

10.0%

15.0%

20.0%

25.0%

0

10,000

20,000

30,000

40,000

50,000

60,000

1Q18 2Q18 3Q18 4Q18 1Q19e


11.5% 11.5%

12.1%

11.6% 11.5%

11.0%

11.2%

11.4%

11.6%

11.8%

12.0%

12.2%

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

1Q18 2Q18 3Q18 4Q18 1Q19e

Net Income ROE

1.4x 1.2x

1.3x

0.9x 0.9x

0.0x

0.2x

0.4x

0.6x

0.8x

1.0x

1.2x

1.4x

1.6x

0

5,000

10,000

15,000

20,000

25,000

30,000

1Q18 2Q18 3Q18 4Q18 1Q19e


MEGA CPO (Buy, PT2019 MXN$108.50)


MEGA – Preview 1Q19 MXN, million



Revenue 4,695 5,132 9.3%


Ebitda 2,374 2,499 5.3%

Net Income 1,155 1,232 6.6%

Margins



Net Margin 24.6% 24.0% -0.6pp

EPS $1.34 $1.43 6.6%

Source: Banorte

Recovering from the cyber-attack. We should recall that last

November the company fell victim to a cyber-attack that disturbed

its collection capacity and generated costs and additional expenses

due to the implementation of safety measures in 4Q18. We consider

that during the first quarter of the year, the aftermath of such attack

will be limited. Furthermore, the company continues to run the trial

phase of the mobile telephone service under the MVNO system

which it will operate under the “Megafon” brand in seven cities of

the Mexican Republic.

Mega maintains double-digit growth in terms of RGUs. We

estimate a 10.6% increase in Megacable’s Revenue- Generating

Unit base (RGUs) to 8.18 million, which would represent 221

thousand net additions. Breaking down RGUs by type of service,

we observe the following variations: +5.4% in video, +10.5% in

internet access and +21.3% in telephone service. Moreover, we

anticipate a 2.1% drop in ARPU due to the Triple play service

bundling package, effect which would be partially offset by the

addition of value-added services (X-view). However, revenue per

single subscriber would grow 2.7% vs 1Q18.

Solid growth rhythm in the corporate segment and pressure on

margins from the MVNO system. We estimate MXN$5.1 billion

in consolidated revenue, up an annual 9.3%. As for revenue in the

corporate segment, we anticipate a 12.3% increase vs. 1Q18, driven

mainly by Metrocarrier operations. Revenue from the corporate

segment would contribute with 17.5% of total revenue. The

company could produce MXN$2.4 billion in EBITDA (+5.3% yoy),

which would equal a 48.7% margin (-190bps vs 1Q18). We expect

profitability to drop due to higher IT costs as well as to additional

expenses from the “Megafon” trial phase. Finally, in terms of net

profit, we forecast a 6.6% surge yoy given the absence of

significant financial expenses.

Net Income & ROE

MXN, million


MXN, million

50.6% 50.2%

47.8%

45.1%

48.7%

40%

42%

44%

46%

48%

50%

52%

3,300

3,550

3,800

4,050

4,300

4,550

4,800

5,050

5,300

1Q18 2Q18 3Q18 4Q18 1Q19e


15.1%

16.4% 16.2% 16.6% 16.4%

14%

15%

16%

17%

0

200

400

600

800

1,000

1,200

1,400

1Q18 2Q18 3Q18 4Q18 1Q19e

Net Income ROE

0.0x

0.1x 0.1x 0.1x

0.0x

-0.1x

0.0x

0.1x

0.2x

(400)

(200)

0

200

400

600

800

1,000

1,200

1Q18 2Q18 3Q18 4Q18 1Q19e


MEXCHEM * (Buy, PT2019 MXN$64.00)

Marissa Garza Ostos

MEXCHEM – Preview 1Q19 USD, million



Revenue 1,756 1,739 -0.9%


Ebitda 330 295 -10.7%

Net Income 79 80 0.9%

Margins




EPS $0.04 $0.04 0.9%

Source: Banorte

Mexchem, a sluggish year-start. The company is set to release

1Q19 earnings on Wednesday April 24th, after the bell. This

quarter, the weak performance of Vinyl should continue, impacting

operation profitability.

Netafim will soon become more comparable, yet challenges

faced by Vinyl continue. It should be mentioned that as of this

quarter, Netafim is soon reaching a comparable basis, as 2 months

of operations were consolidated during 1Q18. Therefore, we expect

year-on-year reductions of 0.9% in sales to US$1.7 million and

10.7% in EBITDA to US$295 million. Hence, we project a 1.9pp

EBITDA margin contraction to 16.9%. Finally, net profit should be

stable yoy, with estimated profit at US$80 million given a less

adverse FX effect.

Vinyl, this quarter will continue to be affected by PVC adverse

market conditions and challenges in terms of ethane distribution in

the U.S. following the shutdown of several plants in Europe and

Asia, due to environmental restrictions, and even despite the

reopening of Vestolit operations since mid-January. These adverse

conditions are expected to continue in upcoming months, thus the

most relevant highlight this quarter, in our opinion, will be news

related to measures that would help mitigate the impact of a

conflicting environment.

Fluent, Netafim will begin to reflect organic growth, expecting to

observe some benefits related to synergies, coupled with a good

performance of operations in Europe and the U.S./Canada, which

we hope will continue.

Flúor, will continue to face an environment of less favorable prices

yoy, given the significant rally that took place particularly during

the first half of the previous year, with more stable figures qoq.

Net Income & ROE

USD, million


USD, million

18.8%

21.5% 21.0%

15.9% 16.9%

0.0%

5.0%

10.0%

15.0%

20.0%

25.0%

1,500

1,550

1,600

1,650

1,700

1,750

1,800

1,850

1,900

1,950

2,000

1Q18 2Q18 3Q18 4Q18 1Q19e


8.3%

11.7% 12.9%

14.7% 14.3%

0.0%

2.0%

4.0%

6.0%

8.0%

10.0%

12.0%

14.0%

16.0%

0

20

40

60

80

100

120

140

160

180

1Q18 2Q18 3Q18 4Q18 1Q19e

Net Income ROE

3.2x

2.7x 2.5x 2.6x

2.8x

0.0x

0.5x

1.0x

1.5x

2.0x

2.5x

3.0x

3.5x

3,300

3,400

3,500

3,600

3,700

3,800

3,900

4,000

4,100

1Q18 2Q18 3Q18 4Q18 1Q19e


NEMAK A (Sell, PT2019 MXN$13.00) Valentín III Mendoza Balderas

NEMAK – Preview 1Q19 MXN, million pesos


Concept 1Q18 1Q19e Chg%

Revenue 23,163 21,323 -7.9%


Ebitda 3,695 3,100 -16.1%

Net Income 1,287 753 -41.5%

Margins




EPS $0.42 $0.24 -41.5%

Source: Banorte

A very negative year-start. Nemak is set to report corresponding

1Q19 earnings on Tuesday, April 23rd, after the bell. We anticipate

a very sluggish quarter, affected not only by a drop in vehicle

production but also by lower aluminum prices and an adverse FX

effect in Europe

Sharp drop in volume. We expect the consolidated volume to fall

7.8% year-on-year to 12.1 million equivalent units, hit by an 8.8%

setback in NAFTA, 5% in Europe and 11.7% in the Rest of the

World, which would be attributed to a decline in vehicle production

of 0.8% in North America, 5.4% in Europe, 12.1% in China and

2.3% in Latin America, from which it is worth noting that Detroit’s

Big Three would observe a 5% contraction.

Lower aluminum prices would exacerbate revenue contraction.

We project sales to drop 10.1% yoy to US$1.1 billion, due to the

fact that in addition to lower volume, we expect a 2.4% contraction

in the price per unit, in view of a 12.8% decline in the price of

aluminum and due to a negative effect from the Euro’s depreciation

(7.6%). By region, we anticipate drops of 8.6% in Nafta, 11.9% in

Europe and 11.6% in the Rest of the World.

Lower operating leverage would pressure the EBITDA margin

by 150bps. According to our projection model, Nemak’s EBITDA

would fall 18.0% yoy to US$161 million during 1Q19, as a result of

a lower operating leverage in all regions where it operates, due to a

decline in volume. Hence, the EBITDA margin would contract

150bps to stand at 14.5%.

A higher tax effective rate would pressure the bottom line even

further. We consider that Nemak’s net profit could reach US$39

m, which equals a 43.5% yoy reduction, as a higher tax effective

rate (28% vs. a previous 18.3%) would also build on the company’s

reported operating weakness.

Net Income & ROE

MXN, million


MXN, million

16.0% 16.7%

13.0%

15.8%

14.5%

0.0%

2.0%

4.0%

6.0%

8.0%

10.0%

12.0%

14.0%

16.0%

18.0%

17,000

18,000

19,000

20,000

21,000

22,000

23,000

24,000

25,000

1Q18 2Q18 3Q18 4Q18 1Q19e


10.2%

7.1%

9.7% 9.6%

8.2%

0.0%

2.0%

4.0%

6.0%

8.0%

10.0%

12.0%

0

200

400

600

800

1,000

1,200

1,400

1Q18 2Q18 3Q18 4Q18 1Q19e

Net Income ROE

2.0x

2.0x

1.9x

1.8x

2.1x

1.7x

1.8x

1.8x

1.9x

1.9x

2.0x

2.0x

2.1x

2.1x

2.2x

24,000

24,500

25,000

25,500

26,000

26,500

27,000

27,500

28,000

28,500

1Q18 2Q18 3Q18 4Q18 1Q19e


OMA B (Buy, 2019 PT MXN$ 118.80)


OMA – Preview 1Q19 MXN, million

Revenue & Adjusted EBITDA Margin MXN, million


Revenue 1,932 1,852 -4.2%

Operating Income 945 1,020 8.0%

Adjusted Ebitda 1,072 1,173 9.4%

Net Income 608 691 13.6%

Margins


Adjusted EBITDA Margin 67.9% 68.1% 0.2pp

Net Margin 31.5% 37.3% 5.8pp

EPS $1.52 $1.76 15.4%

Source: Banorte

Solid growth in 1Q19. We expect Oma to report 1Q19 earnings

with an increase of 9.0% in operating revenue (sum of aeronautic

and non-aeronautic revenue), 8.0% in operating profit, 9.4% in

Adjusted EBITDA and 13.6% in majority net profit, to settle at

MXN$1.7 billion, MXN$1.0 billion, MXN$1.2 billion and

MXN$691 million, respectively.

Passenger traffic spikes by one and a half digit in 1Q19.

During the first quarter of the year, the airport group’s total traffic

closed with a 4.3% increase vs. 1Q18, constituted by a 5.0%

domestic and 0.8% international traffic surge. It should be

mentioned that there was an adverse calendar effect due to an

Easter Week shift this year, from March in 2018 to April in 2019.

The company continues to focus on the diversification of non-

aeronautic revenue through the development of new businesses.

We expect revenue per passenger (sum of aeronautic and non-

aeronautic/ total traffic) to have a positive 2.3% variation over

1Q18.

We expect the group’s Adjusted EBITDA margin to remain

practically flat yoy. We forecast a 6.2pp increase in Oma’s

operating margin, closing at 55.1%. Moreover, we anticipate the

group’s Adjusted EBITDA margin (Adjusted EBITDA/ Sum of

aeronautic and non-aeronautic revenue) would remain stable and

present a marginal +0.2pp variation, to stand at 68.1%, reflecting

economies of scale, as well as control and efficiencies under costs

and company spending.

Oma’s majority net profit would rise 13.6% vs. 1Q18, mainly

due to higher operating results and lower comprehensive financing

cost (-63% yoy), partially offset by a higher amount of income

taxes (+22.0%).

Net Income & ROE

MXN, million

Net Debt & Net debt to Adjusted EBITDA ratio MXN, million

67.9%

70.5%

71.4%

69.9%

68.1%

66.0%

67.0%

68.0%

69.0%

70.0%

71.0%

72.0%

1,750

1,800

1,850

1,900

1,950

2,000

2,050

1Q18 2Q18 3Q18 4Q18 1Q19e

Revenue Adjusted EBITDA Margin

30.2%

37.0% 35.4% 34.2% 34.0%

0.0%

5.0%

10.0%

15.0%

20.0%

25.0%

30.0%

35.0%

40.0%

0

100

200

300

400

500

600

700

800

900

1Q18 2Q18 3Q18 4Q18 1Q19e

Net Income ROE

0.5x

0.7x

0.5x

0.3x 0.4x

0.0x

0.1x

0.2x

0.3x

0.4x

0.5x

0.6x

0.7x

0.8x

0

500

1,000

1,500

2,000

2,500

3,000

3,500

1Q18 2Q18 3Q18 4Q18 1Q19e

Net Debt Net Debt to Adjusted EBITDA

PINFRA * (Buy, 2019 PT MXN$ 215.30)


PINFRA – Preview 1Q19 MXN, million



Revenue 2,340 3,006 28.4%


Ebitda 1,686 1,878 11.4%

Net Income 876 985 12.4%

Margins



Net Margin 37.4% 32.8% -4.7pp

EPS $2.04 $2.29 12.4%

Source: Banorte

Pinfra would present double-digit growth in 1Q19 earnings. We

expect the company to report a 28.4% increase in sales and 11.4%

in EBITDA, to MXN$3.0 billion and MXN$1.9 billion,

respectively.

Higher revenue in Concessions and Construction would more

than offset losses in Plants. Pinfra’s main segment, Concessions-

—67.1% of sales in the last 12 months- would post a 7.6% rally

due to the solid vehicle capacity performance in the company’s

expressways and the increase in tolls. Furthermore, we foresee a

142.7% increase in Construction (27.3% contribution), and

conversely, a 3.5% decline in Plants (5.5% weight).

The company has some assets under development and there lies the

heavy pondering of construction revenue. Such assets are the

following: the second stage of the Pirámides-Texcoco toll road, the

Monterrey – Nuevo Laredo toll road and the Siglo XXI

expressway.

Considerable drop in profitability expected from lower margins

forecasted for the company’s three business segments and

greater weight from Construction (the least profitable

segment). We expect operating profit to grow 11.3% and EBITDA,

11.4%. We anticipate the Concessions segment (the most profitable

business) will post a lower EBITDA margin (-0.8pp), Plants, a

1.5pp drop and Construction profitability to fall 5.9pp. Thus, in the

consolidated balance, we expect margins to post a decline: 9.0pp in

operating and 9.6pp in EBITDA, to 58.6% and 62.5%, respectively.

We project a 12.4% increase in majority net profit vs. 1Q18,

standing at MXN$985 million, as increments in operating earnings

would be partially offset by higher taxes (+57% A/A).

Net Income & ROE

MXN, million


MXN, million

72.1%

64.0% 58.5% 55.5%

62.5%

0.0%

10.0%

20.0%

30.0%

40.0%

50.0%

60.0%

70.0%

80.0%

0

500

1,000

1,500

2,000

2,500

3,000

3,500

1Q18 2Q18 3Q18 4Q18 1Q19e


11.4%

13.5% 13.2%

12.8% 12.7%

10.0%

10.5%

11.0%

11.5%

12.0%

12.5%

13.0%

13.5%

14.0%

0

200

400

600

800

1,000

1,200

1,400

1,600

1,800

1Q18 2Q18 3Q18 4Q18 1Q19e

Net Income ROE

-2.5x

-2.7x

-2.6x

-2.7x

-2.6x

-2.8x

-2.7x

-2.7x

-2.6x

-2.6x

-2.5x

-2.5x

-2.4x

(20,000)

(19,000)

(18,000)

(17,000)

(16,000)

(15,000)

(14,000)

1Q18 2Q18 3Q18 4Q18 1Q19e

Deuda Neta Deuda Neta EBITDA

SORIANA B (Hold, PT2019 $33.00)


SORIANA – Preview 1Q19 MXN, million pesos



Revenue 35,487 35,112 -1.1%


Ebitda 2,505 2,349 -6.3%

Net Income 817 633 -22.6%

Margins




EPS $0.45 $0.35 -22.6%

Source: Banorte

Still a weak quarter. Soriana will report 1Q19 results on Friday,

April 26th, during the MSE trading session. Though we expect a

mild recovery in sales performance among Soriana’s formats,

weakness in Mega should still impact consolidated results.

Moreover aggressive commercial promotions could put some

pressure on gross margin, while higher energy prices and salaries

would offset efficiencies in other expenses, impacting profitability.

Stable LfL. We estimate that SSS may have remained stable in

1Q19, after finally having normalized the supply of merchandise in

stores and having launched aggressive promotions to boost traffic.

Moreover, a 130bps sales floor contraction, following the closing of

9 units in the LTM, may lead total sales fall 1.1% (MXN$35.1

billion).

We expect the company to have sacrificed 10bps of gross

margin to recover customers. We consider Soriana may have

begun aggressive promotion campaigns with the purpose of

recovering the preference of lost customers during the 2018 supply

shortage issue. Hence, we estimate a 10bp- gross margin

contraction, standing at 22.5%.

Despite expense control, higher energy prices and salary

increases would erode EBITDA margin. We anticipate that in

spite of a strict cost control, pressures from higher electricity prices

and salary increases may translate into a 30bps increase in the

proportion of expenses to sales, which added to our expected gross

margin contraction, should translate into a 40bps lower EBITDA

margin to stand at 6.7%. As such, operating cash flow would fall

6.3% yoy to MXN$2.3 billion.

Losses in Soriban and Sodimac would impact net level

performance We expect the company’s net profit to fall 22.6% to

MXN$633 million, hit by a MXN$149 million loss in non-

consolidated subsidiaries (vs –MXN$49 million in 1Q18).

Net Income & ROE

MXN, million


MXN, million

7.1% 7.2%

6.1%

7.9%

6.7%

0.0%

1.0%

2.0%

3.0%

4.0%

5.0%

6.0%

7.0%

8.0%

9.0%

32,000

34,000

36,000

38,000

40,000

42,000

1Q18 2Q18 3Q18 4Q18 1Q19e


7.8% 7.1%

6.5% 5.8%

5.4%

0.0%

1.0%

2.0%

3.0%

4.0%

5.0%

6.0%

7.0%

8.0%

9.0%

0

200

400

600

800

1,000

1,200

1,400

1Q18 2Q18 3Q18 4Q18 1Q19e

Net Income ROE

1.8x 1.7x

2.2x

1.9x

2.2x

0.0x

0.5x

1.0x

1.5x

2.0x

2.5x

0

5,000

10,000

15,000

20,000

25,000

30,000

1Q18 2Q18 3Q18 4Q18 1Q19e


SPORT S (Hold, PT 2019 MXN$24.00)


SPORT – Preview 1Q19 MXN, million pesos



Revenue 450 535 18.8%


Ebitda 59 76 27.8%

Net Income -4 -1 N.A.

Margins



Net Margin -0.9% -0.1% 0.8pp

EPS -$0.05 -$0.01 N.A.

Source: Banorte

Solid year-start. Sports World expects to report 1Q19 earnings on

Friday April 26th, after the bell. We anticipate a solid quarter, one in

which revenue would be driven by the opening of new clubs, while

a higher operating leverage and cost control should offset pressure

on growth, allowing profitability to continue improving.

The opening of 5 new clubs in the LTM would boost active

members. Following the net opening of 5 clubs during the year (3

in this quarter alone), we expect active members to climb 11.1% to

90,540, thanks to the contribution of 7,021 members of new

locations, while for same-clubs, we estimate a 2.5% yoy increase

with a 10bps higher churn rate yoy (5.2%).

Double-digit revenue growth. We project SW sales will post an

11.1% year-on-year expansion, to stand at MXN$535 million in

1Q19. Such figure is explained by an 11.3% surge in revenue from

maintenance and membership fees, while we anticipate other

revenue to increase 63.6% yoy.

Higher operating leverage and corporate cost control would

translate into profitability expansion We consider that an

increment of only 7% in corporate spending, coupled with a higher

leverage of operating expenses- growing 18.1% yoy, below the

sales rhythm, would compensate an 18.8% rally in sales costs.

Thus, EBITDA could grow 27.8% to MXN$76 million, resulting in

a 100bp corresponding margin improvement to 14.2%.

Higher interest payments would pressure the company’s net

profit. We project that SPORT will report MXN$1 million in net

loss, mainly explained by an expected 50.1% higher Net Interest

Expense yoy resulting from 42.8% higher interest payments.

Net Income & ROE

MXN, million


MXN, million

13.2%

15.8%

19.3% 20.1% 14.2%

0.0%

5.0%

10.0%

15.0%

20.0%

25.0%

400

420

440

460

480

500

520

540

560

1Q18 2Q18 3Q18 4Q18 1Q19e


5.1% 5.7% 5.6%

4.9%

4.2%

0.0%

1.0%

2.0%

3.0%

4.0%

5.0%

6.0%

(10)

(5)

0

5

10

15

20

25

1Q18 2Q18 3Q18 4Q18 1Q19e

Net Income ROE

1.5x 1.7x

1.9x 1.7x

1.6x

0.0x

0.5x

1.0x

1.5x

2.0x

0

100

200

300

400

500

600

700

1Q18 2Q18 3Q18 4Q18 1Q19e


TLEVISA CPO (Hold, PT2019 MXN$57.00)


TLEVISA – Preview 1Q19 MXN, million



Revenue 22,812 23,291 2.1%


Ebitda 8,579 8,530 -0.6%

Net Income 678 614 -9.5%

Margins




EPS $0.23 $0.21 -9.3%

Source: Banorte

Inorganic growth would offset plunge in advertising. In the

Content segment, 1Q19 results will reflect the impact of lower

government spending and the effect of an economic slowdown over

advertiser spending. From our standpoint, this may fuel concerns

among investors. At a consolidated level, we may observe moderate

operating variations derived from the acquisition of the residential

fiber-to-the-home Business from Axtel during 4Q18.

Cable would be the only business with sales growth. Televisa

could report MXN$23.2 billion in consolidated earnings, up 2.1%

vs. 1Q18. For the Content division, we estimate a 3.3% slump in

revenue due to an 8% reduction of advertising sales, which would

be partially offset by the sale of programing and licenses (+1.3%)

and the sale of channels (+4.5%). For SKY, we expect a 1.9% drop

in revenue due to a 3.5% downturn in subscribers. In Cable, the

consolidation of Axtel’s massive business and the demand of value-

added services would push sales 12.4%.

We expect pressure on margins in view of lower operating

leverage. We estimate MXN$8.5 billion in EBITDA, down 0.6%

yoy, equaling a margin of -36.6% (-1pp vs 1Q18). We estimate

margin erosion in all business segments, highlighting that of the

Content division due to a lower operating leverage. In this segment,

we expect a 1.7pp decline to 34%. For Sky, we expect a 2.6pp

reduction to 42% from the start of Blue Telecomm operations and

higher advertising expenses. In cable, we estimate a 60bp margin

deterioration due to the consolidation of Axtel’s operations.

And an annual 9.5% downturn in net profit. Lower operating

leverage, a 5% increase in depreciation and amortization coupled

with stable financial expenses would result in a net profit of

MXN$614 million.

Net Income & ROE

MXN, million


MXN, million

37.6%

38.3%

39.2%

37.0% 36.6%

34.0%

36.0%

38.0%

40.0%

20,000

21,000

22,000

23,000

24,000

25,000

26,000

27,000

28,000

1Q18 2Q18 3Q18 4Q18 1Q9e


4.3%

7.4% 7.2%

6.7% 6.6%

3%

4%

5%

6%

7%

8%

0

1,000

2,000

3,000

4,000

5,000

1Q18 2Q18 3Q18 4Q18 1Q9e

Net Income ROE

2.5x 2.4x

2.2x

2.6x 2.5x

1.0x

1.5x

2.0x

2.5x

3.0x

75,000

80,000

85,000

90,000

95,000

100,000

105,000

1Q18 2Q18 3Q18 4Q18 1Q9e


VOLAR A (Hold, 2019 PT MXN$ 18.00)


VOLAR – Preview 1Q19 MXN, million

Revenue & EBITDAR Margin MXN, million


Revenue 5,850 6,951 18.8%

Operating Income -906 -453 N.A.

Ebitdar 823 1,273 54.7%

Net Income -1,118 -322 N.A.

Margins

Operating Margin -15.5% -6.5% 9.0pp

Ebitdar Margin 14.1% 18.3% 4.2pp

Net Margin -19.1% -4.6% 14.5pp

EPS -$1.11 -$0.32 -N.A.

Source: Banorte / Historic and estimated figures excluding IFRS 16

Sales and EBITDAR would advance in 1Q19. This quarter, we

expect Volar to report 18.8% yoy growth in sales and 54.7% in

EBITDAR. Furthermore, the company is estimated to report a lower

net loss (-MXN$322 million) given lower operating and FX losses.

Sharp 16.4% yoy growth in total passengers. A greater rise in

demand vs. capacity was reported, thus increasing passenger

load factor. In 1Q19, Volar reported a 16.4% major surge in

passenger traffic, comprised of an 18.3% domestic and 9.0%

international traffic upturn. The company expanded its total

capacity, measured in terms of available seat miles (ASMs) by

12.8% and total demand, measured by revenue passenger miles

(RPMs), rose 14.2%. Hence, passenger load factor stood at 83.2%

(+1.0pp vs. 1Q18). We should mention that there was an adverse

calendar effect due to an Easter week shift to April, from March,

this year. We foresee a slight drop in the average fare yoy and

double-digit growth in other revenue per passenger. We estimate a

5.3% rise in total revenue per available seat mile (TRASM) and a

1.1% climb in revenue per available seat mile (RASM). Finally, we

do not project changes in passenger revenue per RPM (yield).

Volar’s profitability jumps. We expect the airline to post lower

operating and EBITDA losses. Furthermore, we estimate a 54.7%

EBITDAR increment, to MXN$1.2 billion. Consequently, the

company’s EBITDAR margin would expand 4.2pp, to 18.3%,

mainly explained by operating efficiencies and lower cost of fuel,

partially offset by the depreciation of the exchange rate (~60% of

costs in dlls.). We project operating costs per available seat mile

(CASM) without fuel to drop 4% yoy.

Net Income & ROE

MXN, million

Net Debt & Adjusted Net debt to EBITDAR ratio

MXN, million

Adjusted Net Debt = Net Debt + (Aircraft and engine rent expense) * 7

14.1% 16.9%

26.7% 26.6%

18.3%

0.0%

5.0%

10.0%

15.0%

20.0%

25.0%

30.0%

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

9,000

1Q18 2Q18 3Q18 4Q18 1Q19e

Revenue EBITDAR Margin

-5.1%

1.0%

-8.4% -7.5%

1.2%

-10.0%

-8.0%

-6.0%

-4.0%

-2.0%

0.0%

2.0%

(1,200)

(1,000)

(800)

(600)

(400)

(200)

0

200

400

600

1Q18 2Q18 3Q18 4Q18 1Q19e

Net Income ROE

6.0x

6.8x 7.4x

7.1x 6.7x

0.0x

1.0x

2.0x

3.0x

4.0x

5.0x

6.0x

7.0x

8.0x

(4,500)

(4,000)

(3,500)

(3,000)

(2,500)

(2,000)

(1,500)

(1,000)

(500)

0

1Q18 2Q18 3Q18 4Q18 1Q19e

Net Debt Net Debt to EBITDAR

WALMEX * (Buy, PT2019 MXN$58.00)


WALMEX – Preview 1Q19 MXN, million pesos



Revenue 145,054 151,685 4.6%


Ebitda 14,378 15,193 5.7%

Net Income 8,349 8,625 3.3%

Margins




EPS $0.48 $0.49 3.3%

Source: Banorte

Positive year-start. Walmex will report 1Q19 earnings on

Thursday, April 25th after the bell. We anticipate a good beginning

of the year, one in which the solid performance in Mexico would

offset weakness in Central America, translating into a 10bps

expansion in EBITDA margin.

Consolidated revenue would grow 4.6% yoy. Walmex pre

reported a 3.3% consolidated SSS increase, resulting from a 5.1%

increment in Mexico and a 2.7% decline in Central America.

Meanwhile, the sales floor would have risen 1.6% (1.2% in our

country and 5.4% in CA) with the opening of 120 new stores in the

LTM. Thus, consolidated revenue would reach MXN$151.7 billion

(+4.6%).

We expect the gross margin to remain stable. We expect that

during the first quarter of the year, improved commercial conditions

would have allowed the expansion of Walmex’s price gap vs the

competition without pressuring the gross margin. With this in mind,

we expect the latter margin to remain stable at 22.9%.

Double-digit EBITDA margin by year-start. According to our

projections model, the company’s EBITDA could grow 5.7% yoy

to MXN$15.2 billion, resulting in a 10bps EBITDA margin

expansion to 10%, as a 6.1% increase in Mexico’s metric

(MXN$12.7 billion) should offset a 2.1% decline in that of Central

America.

78.4% Net Interest Expense, given lower FX gains, would curb

the company’s net profit growth. We project that net income for

Walmart de Mexico and Central America will reach MXN$8.6

billion in 1Q19, which equals a 3.3% year-on-year growth. It

should be noted that we consider lower FX gains (MXN$12 million

vs previous MXN$92 million) would pressure Net Interest

Expenses by 78.4% yoy, curbing the company’s net profit growth.

Net Income & ROE

MXN, million


MXN, million

9.9%

9.2%

10.1%

10.7%

10.0%

8.0%

8.5%

9.0%

9.5%

10.0%

10.5%

11.0%

0

50,000

100,000

150,000

200,000

1Q18 2Q18 3Q18 4Q18 1Q19e


30.6%

23.9% 23.3% 22.3% 22.2%

0.0%

5.0%

10.0%

15.0%

20.0%

25.0%

30.0%

35.0%

0

2,000

4,000

6,000

8,000

10,000

12,000

14,000

1Q18 2Q18 3Q18 4Q18 1Q19e

Net Income ROE

-0.3x -0.3x

-0.3x -0.4x

-0.8x -0.9x

-0.8x

-0.7x

-0.6x

-0.5x

-0.4x

-0.3x

-0.2x

-0.1x

0.0x

(60,000)

(50,000)

(40,000)

(30,000)

(20,000)

(10,000)

0

1Q18 2Q18 3Q18 4Q18 1Q19e


Certification of Analysts. We, Gabriel Casillas Olvera, Delia Maria Paredes Mier, Alejandro Padilla Santana, Manuel Jiménez Zaldívar, Tania Abdul Massih Jacobo, Katia Celina Goya Ostos, Juan Carlos Alderete Macal, Víctor Hugo Cortes Castro, Marissa Garza Ostos, Miguel Alejandro Calvo Domínguez, Hugo Armando Gómez Solís, Gerardo Daniel Valle Trujillo, José Itzamna Espitia Hernández, Valentín III Mendoza Balderas, Santiago Leal Singer, Francisco José Flores Serrano, Francisco Duarte Alcocer, Jorge Antonio Izquierdo Lobato and Leslie Thalía Orozco Vélez, certify that the points of view expressed in this document are a faithful reflection of our personal opinion on the company (s) or firm (s) within this report, along with its affiliates and/or securities issued. Moreover, we also state that we have not received, nor receive, or will receive compensation other than that of Grupo Financiero Banorte S.A.B. of C.V for the provision of our services.

Relevant statements. In accordance with current laws and internal procedures manuals, analysts are allowed to hold long or short positions in shares or securities issued by companies that are listed on the Mexican Stock Exchange and may be the subject of this report; nonetheless, equity analysts have to adhere to certain rules that regulate their participation in the market in order to prevent, among other things, the use of private information for their benefit and to avoid conflicts of interest. Analysts shall refrain from investing and holding transactions with securities or derivative instruments directly or through an intermediary person, with Securities subject to research reports, from 30 calendar days prior to the issuance date of the report in question, and up to 10 calendar days after its distribution date.

Compensation of Analysts.

Analysts’ compensation is based on activities and services that are aimed at benefiting the investment clients of Casa de Bolsa Banorte Ixe and its subsidiaries. Such compensation is determined based on the general profitability of the Brokerage House and the Financial Group and on the individual performance of each analyst. However, investors should note that analysts do not receive direct payment or compensation for any specific transaction in investment banking or in other business areas.

Last-twelve-month activities of the business areas.

Grupo Financiero Banorte S.A.B. de C.V., through its business areas, provides services that include, among others, those corresponding to investment banking and corporate banking, to a large number of companies in Mexico and abroad. It may have provided, is providing or, in the future, will provide a service such as those mentioned to the companies or firms that are the subject of this report. Casa de Bolsa Banorte or its affiliates receive compensation from such corporations in consideration of the aforementioned services.

Over the course of the last twelve months, Grupo Financiero Banorte S.A.B. C.V., has not obtained compensation for services rendered by the investment bank or by any of its other business areas of the following companies or their subsidiaries, some of which could be analyzed within this report.

Activities of the business areas during the next three months.

Casa de Bolsa Banorte, Grupo Financiero Banorte or its subsidiaries expect to receive or intend to obtain revenue from the services provided by investment banking or any other of its business areas, by issuers or their subsidiaries, some of which could be analyzed in this report.

Securities holdings and other disclosures.

As of the end of last quarter, Grupo Financiero Banorte S.A.B. of C.V. has not held investments, directly or indirectly, in securities or derivative financial instruments, whose underlying securities are the subject of recommendations, representing 1% or more of its investment portfolio of outstanding securities or 1 % of the issuance or underlying of the securities issued.

None of the members of the Board of Grupo Financiero Banorte and Casa de Bolsa Banorte, along general managers and executives of an immediately below level, have any charges in the issuers that may be analyzed in this document.

The Analysts of Grupo Financiero Banorte S.A.B. of C.V. do not maintain direct investments or through an intermediary person, in the securities or derivative instruments object of this analysis report.

Guide for investment recommendations.

Reference

BUY When the share expected performance is greater than the MEXBOL estimated performance.

HOLD When the share expected performance is similar to the MEXBOL estimated performance.

SELL When the share expected performance is lower than the MEXBOL estimated performance.

Even though this document offers a general criterion of investment, we urge readers to seek advice from their own Consultants or Financial Advisors, in order to consider whether any of the values mentioned in this report are in line with their investment goals, risk and financial position.

Determination of Target Prices

For the calculation of estimated target prices for securities, analysts use a combination of methodologies generally accepted among financial analysts, including, but not limited to, multiples analysis, discounted cash flows, sum-of-the-parts or any other method that could be applicable in each specific case according to the current regulation. No guarantee can be given that the target prices calculated for the securities will be achieved by the analysts of Grupo Financiero Banorte S.A.B. C.V, since this depends on a large number of various endogenous and exogenous factors that affect the performance of the issuing company, the environment in which it performs, along with the influence of trends of the stock market, in which it is listed. Moreover, the investor must consider that the price of the securities or instruments can fluctuate against their interest and cause the partial and even total loss of the invested capital.

The information contained hereby has been obtained from sources that we consider to be reliable, but we make no representation as to its accuracy or completeness. The information, estimations and recommendations included in this document are valid as of the issue date, but are subject to modifications and changes without prior notice; Grupo Financiero Banorte S.A.B. of C.V. does not commit to communicate the changes and also to keep the content of this document updated. Grupo Financiero Banorte S.A.B. of C.V. takes no responsibility for any loss arising from the use of this report or its content. This document may not be photocopied, quoted, disclosed, used, or reproduced in whole or in part without prior written authorization from Grupo Financiero Banorte S.A.B. of C.V.

GRUPO FINANCIERO BANORTE S.A.B. de C.V.

Research and Strategy

Gabriel Casillas Olvera Chief Economist and Head of Research [email protected] (55) 4433 - 4695

Raquel Vázquez Godinez Assistant [email protected] (55) 1670 - 2967

Delia María Paredes Mier Executive Director of Economic Analysis [email protected] (55) 5268 - 1694

Katia Celina Goya Ostos Senior, Global Economist [email protected] (55) 1670 - 1821

Juan Carlos Alderete Macal, CFA Senior Economist, Mexico [email protected] (55) 1103 - 4046

Miguel Alejandro Calvo Domínguez

Economist, Regional [email protected] (55) 1670 - 2220

Francisco José Flores Serrano Economist, Mexico [email protected] (55) 1670 - 2957

Francisco Duarte Alcocer Analyst, Global Economist [email protected] (55) 1670 - 2707

Lourdes Calvo Fernández Analyst (Edition) [email protected] (55) 1103 - 4000 x 2611

Alejandro Padilla Santana Head Strategist – Fixed income and FX [email protected] (55) 1103 - 4043

Santiago Leal Singer FX Senior Strategist [email protected] (55) 1670 - 2144

Leslie Thalía Orozco Vélez Fixed Income and FX Strategist [email protected] (55) 1670 - 1698

Manuel Jiménez Zaldivar Director Equity Research —Telecommunications / Media

[email protected] (55) 5268 - 1671

Victor Hugo Cortes Castro Technical Analysis [email protected] (55) 1670 - 1800

Marissa Garza Ostos Equity Research – Conglomerates / Financials/ Mining / Petrochemicals


José Itzamna Espitia Hernández Equity Research – Airlines / Airports / Cement / Infrastructure / REITs


Valentín III Mendoza Balderas Equity Research – Auto Parts/ Consumer Discretionary / Real Estate / Retail


Jorge Antonio Izquierdo Lobato Analyst [email protected] (55) 1670 - 1746

Itzel Martínez Rojas Analyst [email protected] (55) 1670 - 2251

Corporate Debt

Tania Abdul Massih Jacobo Director Corporate Debt [email protected] (55) 5268 - 1672

Hugo Armando Gómez Solís Senior, Corporate Debt [email protected] (55) 1670 - 2247

Gerardo Daniel Valle Trujillo Analyst, Corporate Debt [email protected] (55) 1670 - 2248

Armando Rodal Espinosa Head of Wholesale Banking [email protected] (55) 1670 - 1889

Alejandro Eric Faesi Puente Head of Global Markets and Institutional Sales [email protected] (55) 5268 - 1640

Alejandro Aguilar Ceballos Head of Asset Management [email protected] (55) 5268 - 9996

Arturo Monroy Ballesteros Head of Investment Banking and Structured Finance


Gerardo Zamora Nanez Head of Transactional Banking, Leasing and Factoring


Jorge de la Vega Grajales Head of Government Banking [email protected] (55) 5004 - 5121

Luis Pietrini Sheridan Head of Private Banking [email protected] (55) 5004 - 1453

René Gerardo Pimentel Ibarrola Head of Asset Management [email protected] (55) 5268 - 9004

Ricardo Velázquez Rodríguez Head of International Banking [email protected] (55) 5004 - 5279

Víctor Antonio Roldan Ferrer Head of Corporate Banking [email protected] (55) 5004 - 1454

Economic Analysis

Fixed income and FX Strategy

Equity Strategy

Wholesale Banking

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