Equity Research

August 12th, 2019 Monthly Andean Strategy Update Keeping a cautious view on the Andes

In July, the Andean region posted a negative performance across the CREDICORP CAPITAL RESEARCH board in line with other LatAm markets except Brazil (+2.9% in USD terms). Chile, Peru and Colombia posted -5.0%, -3.8% and -1.8% returns in USD terms (-1.9%, -3.2% and +0.8% in local terms), respectively; LatAm remained flat. Daniel Velandia, CFA +(571) 3394400 ext. 1505 We maintain our Overweight recommendation for Chile mainly as a [email protected] relative call in the Andes. • We have cut our 2019 and 2020 GDP growth projections to 2.5% from Carolina Ratto 2.7% and to 3.1% from 3.3%, respectively, reflecting a more challenging +(562) 2446 1768 macro landscape for 2019. [email protected] • Although the market has been in line with the weak performance of other EM markets due to global risks, internal activity has not picked up, Tomás Sanhueza which in our view should improve going into the end of 2019 due to a +(562) 2446 1751 weaker comp base. This will be crucial for the market's performance. [email protected] • Large cap names continue to be the most relevant underperformers of the local market, dragging its performance. Sebastián Gallego, CFA • Valuations remain discounted, even when adjusting our earnings for +(571) 3394400 ext. 1594 relevant sectors such as Forestry. Retail could have further downward [email protected] revisions due to a tough scenario for consumption in Chile. Daniel Córdova We stay Neutral on Colombia; our biggest concern at the moment is +(511) 416 3333 Ext. 33052 related to the global volatility and FX performance uncertainty. [email protected] • The local index declined 1.8% in USD terms during July, while the MSCI LatAm stayed relatively flat. • On the local front, recent leading indicators suggest that economic activity continues to advance in line with our expectations. Our GDP forecast stands at 3.3% for 2019. • Forward multiples continue to look attractive. P/E and EV/EBITDA multiples are trading below one standard deviation compared to the average of the last three years. • Our equity strategy continues to be mainly focused on banks; recovery in loan growth along with lower provision expenses are key themes of our thesis. • We are removing Cementos Argos from our top picks; weak results for 2Q19 and a foggy outlook support our decision. • Accordingly, our top picks are Davivienda, Bancolombia and Nutresa.

We maintain our Underweight recommendation for Peru. Risks from the external front remain, and political noise could negatively impact the expected rebound in economic activity in 2H19. • Expectations about progress in the US-China trade stand-off soured last month, leaving commodity price risks still high. • Private consumption remains resilient, but we will monitor any effect from increased political uncertainty. • Political noise has risen on the possibility of earlier general elections. • From a medium-term viewpoint, we favor utilities and consumption- related stocks to avoid mining companies’ volatility and high beta IMPORTANT NOTICE (US FINRA RULE 2242) This document is intended for INSTITUTIONAL INVESTORS and is not subject to all of the independence and sectors. disclosure standards applicable to debt research reports prepared for retail investors. Credicorp Capital may do or seek to do business with companies • We maintain InRetail and Ferreycorp as our Top Picks on solid covered in its research reports. As a result, investors should be aware that the firm may have a conflict of interest that could affect the objectivity of this report. company fundamentals and favorable sector dynamics. Investors should consider this report as only a single factor in making their investment decision. Refer to important disclosures on page 23 to 26, Analyst Certification on Page 23. Additional disclosures on page 26. 1 Actualizar Contents

Monthly Andean Strategy Update

Chile: Global noise has shaken the local index; entering volatility 5 Top Picks 8 Colombia: We stay Neutral while we continue to monitor global volatility 9 Top Picks 13 Peru: We take a more defensive stance amid external and domestic risks 14 Top Picks 16

Valuation Summary 17

Economic Forecasts 21

2 Actualizar LTM Andean Equities Performance (in USD)

IPSA COLCAP SP BVL General Index MSCI Latam 120

110

100

90

80

70 Aug-18 Oct-18 Dec-18 Feb-19 Apr-19 Jun-19 Aug-19

Source: Credicorp Capital, & Bloomberg

Andean Equities Fwd P/E (12 month rolling) vs 5Y historical average

P/E FWD vs Historical 3Y Average

20.0x 30.0% 18.0x 15.4x 20.0% 16.0x 14.3x 12.5x 14.0x 10.0% 12.0x 10.0x 0.0% 8.0x 6.0x -10.0% -14% -17% 4.0x -20.0% 2.0x -24% .0x -30.0% Chile Peru* Colombia

*Peru: vs 2Y historical average Andean Equities Fwd EV/EBITDA (12 month rolling) vs 5Y historical average

EV/EBITDA FWD vs Historical 5Y Average

9.0x 8.0x 0.0% 8.0x 7.0x 7.0x 6.4x -5.0% 6.0x -10.0% 5.0x -11% 4.0x -15% -15.0% 3.0x 2.0x -20% -20.0% 1.0x .0x -25.0% Chile Peru Colombia Source: Credicorp Capital, & Bloomberg

3 Strategy Summary within Andean Context Long view Short view (12-to-18 months) (1-to -3 months) Chile Allocation: Overweight (+) Safe haven on the regional landscape compared to riskier markets The Cencosud's real estate IPO and Enel Americas (+) Discounted valuations when compared to its history capital increase have passed. Although one deal (+) Positive recovery in 2H19 of macro figures on a weak comp base. has gone by, we still have to wait not to have further (-) Downside risk to GDP growth due to recent figures overhang. Global risks continue to take its toll on the (-) Negative impact of global risks market and recovery in macro and earnings front (-) No clear catalyst with lacking earning growth in short term seems to be going slower than expected. However, (-) Exposure to risks coming from Argentina and Brazil we remain optimistic going into the end of 2019 and confident on our relative call in the Andes. Strategy: We continue to favor a stock picking strategy of companies with solid fundamentals, earnings momentum and clear catalysts. Top picks: ILC, Engie Chile and SQM-B Colombia Allocation: neutral (+) Better operating/financial trends at the banking sector. The most important issues in the short term are: (+) Solid macro data that support our 3.3% GDP growth forecast. global tensions, oil prices, exchange rate (+) Inflows coming from local pension funds & foreign investors. performance, corporate governance issues/news, (-) Volatility across foreign markets. special operations for ISA and Éxito,2Q19 results, (-) Twin deficits. final decision of Ruta del Sol 2. (-) Labour market.

Strategy: We decided to stay Neutral in Colombia. We see higher risk aversion around the globe, which is negative for Colombia. From a bottom-up perspective, we maintain Bancolombia and Davivienda in our top picks given the positive perspective on the sector. On the other hand, we removed Cemargos from our top picks given an expectation of weak results/outlook in 2Q19. Top picks: Davivienda, Bancolombia, and Nutresa. Peru Allocation: Underweight (+) Private consumption still remains resilient, although it could show signs of Luz del Sur would benefit from expectations on the softening in coming months. sale of Sempra’s controlling share. We take (-) Trade stand-off between US and China continues, without signals of a trade deal advantage of IFS' correction (not justified by its in sight; still high commodity price risks. fundamentals) and expected strong 2Q19 results. (-) Political noise has increased following the Executive's proposal to bring general InRetail also offers an attractive entry level; 2Q19 elections forward by one year. results should reveal more gains from synergies with (-) Valuations of non-mining companies remain at their historical averages. Quicorp. Engie backs our defensive stance, with upside potential. Nexa could benefit from a recovery in zinc prices, with a deep discount vs. global peers.

Strategy: Trading ideas: As short-term commodity price risks persist, we continue favoring stocks such as Luz del Sur, IFS, InRetail, Engie Peru and Nexa Ferreycorp, linked to the upcycle of mining investment. Also, resilient private Resources. consumption and company fundamentals support our Top Pick InRetail. Top Picks: InRetail and Ferreycorp.

4 Chile Global noise has shaken the local index; entering volatility

Global risks and In July, the Chilean market posted a negative return in CLP (-1.9%) and USD (- noise have become a 5.0%), below the Colombian market (+0.8% in local terms) but above the Peruvian key driver for Chile, market (-3.9% in local terms). In July, the local market started a strong correction that in line with other EM has continued in August, coupling with the global EM markets. We are still looking at markets. weak activity in terms of flows with local investors looking for a better entry point while foreign investors have been slightly more sellers in the last weeks, which has been exacerbated by recent news on global risks. The two most relevant capital market events of the year have already taken place: (i) Cencosud’s real estate IPO and (ii) the capital increase of Enel Americas. However, the trend in flows has not changed. On the macro front, figures have disappointed despite positive retail sales in May, which reverted during June with weaker-than-expected figures. The June activity figure was 1.3%, below market expectations (1.6-1.8%). Therefore, we have not seen any significant rebound in activity as was expected for 2H19. In our view, this rebound seems crucial for a potential turnaround in the performance of the local market.

Global risks have shaken the LatAm market. LatAm has shown a 5% appreciation during the year due to Brazil (+13% in USD), Argentina (+12% in USD) and Colombia (+8% in USD); Chile has been the underperformer of the region (-9% in USD). However, the recent performance of the LatAm markets (excluding Brazil and Argentina) has been weak. In fact, Chile’s drop is explained by only the last three months, similar to what happened in Mexico. Colombia and Peru have also underperformed (-6% and -5%, respectively). Therefore, we believe the Andean region has been shocked by the global turmoil related to the trade war between the USA and China that has intensified in recent months. However, it is worth noting that some internal issues have also been a major driver of the underperformance of these markets.

Large cap names Breaking down the weak performance so far this year. The weak performance of the have been the main IPSA during the year (-5.6% YTD) is mostly explained by large cap names: Copec, SQM- driver of the weak B, CMPC, Falabella and Enel Americas. These companies have been impacted by performance of the specific issues: (i) the forestry sector (CMPC and Copec) has been dragged by local index. headwinds in the global pulp market that have caused pulp prices to plummet, (ii) SQM-B has been negatively impacted by a downward revision in guidance for 2019, which puts pressure on earnings growth in the mid term, (iii) Falabella has been pressured by a challenging outlook for traditional retailers due to e-commerce players, a weak retail performance that has impacted SSS and high inventory levels and (iv) Enel Americas has been negatively impacted by the large capital increase of USD 3.0bn and potential expensive M&A activity. On the positive side, Parauco, Entel, Banco de Chile, CCU and Cencosud have outperformed. In the case of Parauco, the weakness in retail has shifted attention towards the real estate segment, which has proven to be more resilient with accretive M&A activity. Entel has shown more resilient margins in Chile, consolidating a better outlook for results in 2019 and 2020. Banco de Chile has been boosted by resilient results as well as the positive impact of higher float. CCU has also been resilient in terms of results, with solid volume growth and margins. Finally, after the IPO of Cencoshopp, Cencosud has been positively impacted by a better outlook for EPS growth after lowering its debt and a positive revaluation of its real estate assets.

5 We have cut our 2019 We are cutting our GDP growth forecasts for both 2019 and 2020 due to a weaker- and 2020 GDP than-expected 1H19 and significant external risks. The BCCh announced that the growth forecasts to Imacec grew by 1.3% y/y in Jun-19, below market expectations (1.8% y/y) but closer to 2.5% from 2.7% and our forecast (1.6% y/y). Thus, GDP advanced ~1.75% y/y in 1H19, compared to an initial 3.1% from 3.3%, estimate of close to 2%. The mining industry increased 0.3% y/y in Jun-19 despite a 14- respectively. day labor strike at Chuquicamata (one of the largest copper mines in Chile), but non- mining sectors grew only 1.4% y/y, maintaining a downward trend (May-19: 2.8%). This performance confirms weaker-than-expected economic activity in 1H19 and points towards the materialization of downside risks for the upcoming quarters. All-in, the disappointing behavior of the economy in 1H19 amid lower-than-expected mining and non-mining production, the continued fall in confidence gauges and a riskier external scenario with copper prices currently near 2.55 USD/lb leads us to cut our 2019 GDP growth forecast to 2.5% y/y, down from 2.7%, and our 2020 GDP growth forecast to 3.1%, down from 3.3%. Regarding the latter, although lower growth this year would result in a more favorable statistical base for 2020, the truth is that a strong recovery of activity seems to rest on several factors, including the effective materialization of investment projects, faster progress of structural reforms in Congress and a better external backdrop that leads to higher growth for trading partners. Given the relatively high degree of uncertainty on each of these factors, we currently prefer to be more cautious. That said, in our baseline scenario, we still expect the economy to speed up in 2H19, posting a growth rate of ~3.25% y/y.

Given this lower expected economic growth, local and external downside risks, subdued inflation pressures and the BCCh’s clear dovish bias, we think that the likelihood of a 50- bps rate cut in the Sep-19 meeting has increased considerably. In fact, we think that inflation would have to surprise to the upside by a non-negligible magnitude in Jul-19 and/or Aug-19 (especially the services component) for a 50-bps cut to be prevented.

Another weak earnings season in Chile. In our analysis, we are not including the one- 2Q19 earnings for off payment (USD 306mn) received by CCU in 2Q18 for the Budweiser license and are Forestry, Retail and using comparable figures regarding IFRS 16 for companies that are significantly affected. Mining will be weak. We forecast that top line will increase a mild 3.2% y/y in CLP terms and that EBITDA will decrease 8.0% y/y, leading to a significant margin contraction for our company sample. Retail and Forestry explain a significant part of the contraction. Retail has been negatively impacted by weak SSS, high inventory levels, high promotional activity in supermarkets and investment in IT in the financial business, resulting in a 16% y/y drop in EBITDA for the sector (ex IFRS 16). Regarding Forestry, we project that EBITDA will decrease 35.5% y/y in USD terms mainly due to lower pulp prices and the negative impact of FX depreciation in the fuel business for Copec and in the tissue business for CMPC. We also want to highlight the EBITDA performance for SQM, which we expect to drop 26% y/y in USD terms on the back of a tough comp base in all business lines. EPS for our sample should post a 5.2% drop, which is mostly attributable to Forestry, Mining and Retail. Regarding our Andean strategy, we continue to be Overweight in Chile; however, earnings catalysts will probably be clearer during 2H19. We expect positive surprises for Banco de Chile, Santander and SK and negative surprises for BCI, Forus, Falabella, Ripley and CAP.

6 Chile Strategy

We are keeping Chile in an Overweight position in the Andean region, mostly on a relative call. We still believe that a gradual recovery will come in 2H19 on the back of more favorable macro performance and a weaker base of comparison for EPS growth; however, it probably will take longer than expected given the current scenario. Compared to Colombia and Peru, Chile seems to have lower downside risks at these levels, considering individual balance of risks. Colombia has been a strong outperformer during the year (+8.0% in USD), becoming slightly more stretched in valuations with a more limited upside. In the case of Peru, global turmoil has impacted commodities, which are highly linked to mining in Peru. In addition, the recent political scenario is not helping Peru’s performance.

Our earnings growth estimate for the IPSA index in 2019 stands at 0% y/y in CLP terms (-5% in USD terms), which implicitly reflects a 15.4x P/E Fwd for the Chilean market (~14% discount against the three-year average). This earnings growth includes our recent updates on Banks and Forestry. Particularly in Forestry, there was a strong downward revision to our previous earnings estimates (above 60%). We do not rule out the possibility that relevant companies in the Retail sector could have some downward revisions, which could pressure the performance of earnings growth in 2019 even further. Therefore, a downward revision of earnings for our sample is still not out of the picture. For 2020, our earnings growth estimates in CLP and USD are 15% and 17%, respectively.

Including revisions of the estimates for some sectors, valuations are still suggesting discounted valuations. Our Chilean equity sample is trading at 15.4x P/E 12m Fwd and 8.0x FV/EBITDA 12m Fwd, which continue to be significantly discounted by more than one standard deviation against the market’s three-year average. When adjusting earnings estimates in some of the relevant sectors such as Retail, there is still a significant discount that softens the potential downside.

Although short-term momentum appears to be weak and we do not expect earnings growth to pick up until further into 2H19, we believe that downside risks are much more limited than they are in the other Andean markets and that the two relevant capital market events that occurred in June and July should reduce the market overhang seen in recent months. Still, we believe our relative play will take a couple of months to pay off, considering the weak momentum of the Chilean market.

P/E Forward (12-month rolling) FV/EBITDA Forward (12-month rolling)

26 12 24 11 22

20 10

18 9 16 8 14 15.4x 8-0x

12 7 Aug-13 Aug-15 Aug-17 Aug-19 Aug-13 Aug-15 Aug-17 Aug-19 Source: Company Reports, Credicorp Capital, & Bloomberg

7 Top Picks Chile

Our Top Picks We maintain our selective strategy in the Chilean stock market. We have maintained are ILC, Engie ILC, Engie Chile and SQM-B as our Top Picks. Chile, and SQM. ILC (BUY; TP: CLP 14,200). We recently updated our coverage of ILC shares, maintaining our Buy rating and adjusting our TP from CLP 12,900 to CLP 14,200 (+10%), which implies a ~30% return including dividends. ILC shares decouple from the rest of the Chilean market as they are one of the few stories that offer an attractive ordinary EPS growth outlook for 2019 and beyond. In addition, valuations suggest that shares are cheap, and, since regulatory risk has significantly decreased, we believe downside risk is limited. This, together with a high dividend yield (over 4%), supports our thesis that ILC shares are high-quality assets that work perfectly as a long-term investment opportunity.

Engie Chile (BUY; TP: CLP 1,450). We are maintaining Engie Chile in our Top Picks. Its defensive profile, excellent long-term PPA portfolio and attractive dividend yield support our recommendation. The EBITDA 2019 guidance of USD 470mn implies a ~30% increase in results, on the back of the expansion of 375MW in the IEM project and sales of the new SIC contract.

SQM (BUY; TP: CLP 32,000 (local) / USD 48 (ADR)). We recently updated our coverage of SQM, upgrading shares to Buy and adjusting our 2019YE TP to CLP 32,000 (local) / USD 48 (ADR). Our rating upgrade comes after the strong underperformance of the shares since our last report in March of 2019 (-19.3% (local) and -21.2% (ADR) vs -3.9% for the IPSA). We believe our recommendation could take a couple of months to pay off as we foresee challenging earnings momentum in the upcoming quarters; however, we believe the market is pricing in an extremely bearish long-term scenario for the company, and, therefore, we believe shares are extremely discounted. All in, we believe this is a good entry point for investors.

Chile - Top Picks

Chilean Picks Last Target Total Mkt. P/E FV/EBITDA P/BV Div Yield Price Price Upside Return (USD mn) 2019E 2020E 2019E 2020E LTM 2019E Sectors ILC 10,714 14,200 32.5% 37.3% 1,500 10.3 8.9 nm nm 1.5 4.7% Conglomerates Engie Chile 1,225.0 1,450.0 18.4% 22.7% 1,762 10.3 9.7 5.6 5.3 0.9 4.4% Utilities SQM-B 18,999.0 32,000.0 68.4% 74.1% 7,381 26.9 24.3 11.0 10.4 3.5 5.7% Materials Chilean Picks a 39.8% 44.7% 10,644 15.8 14.3 8.3 7.8 2.0 4.9% IPSA 4,780 6,150 29% 33% 142,376 15.9 14.0 8.1 8.5 1.5 4.0% a Simple average, excluding Market Capitalization

Sources: Bloomberg, Company Reports and Credicorp Capital a Simple average, excluding Market Capitalization b Prices in local currencies

8 Colombia We stay Neutral while we continue to monitor global volatility

Market Color

During July, the COLCAP index underperformed the MSCI Latam index. The local index declined 1.8% in USD terms (+0.85% in local currency), compared to a relatively flat performance of the MSCI Latam. In any case, we highlight that the Colombian market has outperformed the MSCI Latam on a YTD basis (+11.9% vs +8.9%). In fact, the local index has advanced 15.9% when measured in COP terms. Going forward, global volatility remains a source of concern, particularly after tension between the USA and China has escalated in recent days.

From a bottom-up perspective, Canacol Energy was the leader during July, while Corficol, Bogota and Exito also had a positive month. On the other hand, Cemex Latam Holdings was the biggest loser for July. Regarding Canacol, we believe that there were two key highlights as the company announced: i) the completion of the Jobo to Cartagena gas pipeline, which should boost corporate sales towards 215 mmscfpd (over 50% increase compared to 1Q19) and ii) a positive drilling test of the Ocarina 1 well which flowed at a final rate of 33 mmscfpd. Also of note, the changes coming from the conglomerates law may continue to have a positive effect on shares associated to Aval. Lastly, the potential tender offer for Exito set at COP 18,000/share continued to have a positive effect on shares of Exito. It is worth noting that we continue to wait for a decision from the audit and risk committee of Exito, which has a deadline of August 31st, 2019 to give its opinion about the proposed tender offer. The committee recently announced the selection of Inverlink, a well-known investment bank in Colombia, as the independent advisor for the committee.

The Government and the banks did not reach an agreement for the settlement of the Ruta del Sol 2 (RDS 2) case before the final decision of a local tribunal. In July, the Minister of Transportation announced that the Government was working with banks on a potential resolution of the RDS 2 case; the banks were willing to forgive the current interest on the existing debt, which currently amounts to ~COP 230 bn (~USD 68 mn). Recall that the existing total debt related to this case for banks is placed at ~USD 415 mn (includes interest) given the initial two payments. Despite the efforts, the parties involved were not able to reach an agreement on this matter, and the Government announced that the final decision would be made by August 6th, 2019 by a local tribunal. It is worth noting that the deadline for this decision was moved as the prior date for the decision was August 20th, 2019.

A rebalancing process took place at the end of July; common shares of Aval exited the index. For the rebalancing process, we were initially expecting higher inflows, particularly for ISA. However, the local stock exchange decided not to include the divestment of EPM (~15 mn shares) in its calculations. Even though the transaction was announced to the market on June 26th, 2019, the ownership was not updated on Deceval’s database until the beginning of July. Beyond the expected changes in ISA, we reiterate that common shares of Aval exited the index; the latter was mainly explained by a lower figure on the selection function. In any case, we highlight that preferred shares of Aval remained in the index (most liquid class), and, therefore, we do not believe the changes in the COLCAP were material.

9 Regarding market players and flows, foreign investors returned to the green territory after three consecutive months with net selling positions. Meanwhile, ETF flows to equities in Colombia have maintained a strong pace relative to other countries in the region. In Jun-19, foreign investors registered a net buying position of USD 74.3 mn, making these agents the largest net buyer during the month. That said, we reiterate that local pension funds remain the largest net buyer on a YTD basis with an accumulated net buying position of USD 370 mn; the second largest net buyer (brokerage firms) only has USD 24.0 mn. On the other hand, foreign investors maintained a net selling position, when looking at the accumulated picture, with a figure of USD 74.2 mn. Regarding flows, we highlight that Colombia is currently in ninth place among emerging markets with total inflows of USD 381 mn on a YTD basis. In the Latam region, this is only surpassed by Brazil, which has total inflows of USD 421 mn on a YTD basis. Peru and Chile continue to be behind Colombia with total inflows of USD 14.5 mn for the former and total outflows of USD 44 mn for the latter.

Macro / political developments

There was positive data on the macro front during the month, and we expect the Central Bank to stay on hold for the remainder of the year. DANE published the main activity leading indicators of May-19, which posted strong dynamics across the board. Retail sales rose 8.2% y/y, way above the consensus and our estimate (5.0% y/y and 5.3% y/y, respectively), while industrial production increased 3.2% y/y, below the market’s forecast but above our call (4.2% y/y and 1.6% y/y, respectively). Overall, economic activity continued to improve on the margin after the disappointing 1Q19 GDP growth, which was dragged down by the construction sector. Retail sales continued to show the strong momentum of private consumption, which we expect to be maintained in the coming quarters, while industrial production continued to grow at a healthy pace amid a comfortable COP but slowing external demand. This data allows us to remain comfortable with our 3.3% GDP growth forecast for 2019.

The BanRep left the policy rate unchanged at 4.25% for the fifteenth straight month in a unanimous vote, as expected. At this point, there is broad consensus on stability in the monetary policy stance in the short term; therefore, the most interesting factor to monitor has been the post-meeting press conference of MoF Carrasquilla and Governor Echavarría. Overall, both emphasized that, under current conditions of inflation (above the target) and output (below potential), the 4.25% level of the repo rate is appropriate and that changes do not seem probable in the coming months.

Finally, we see some upside risk to our current inflation forecast for 2019. The CPI rose 0.27% m/m in Jun-19, slightly above our estimate (0.25%) and the market consensus forecast (0.21%). The annual figure accelerated 12 bps to 3.43% y/y, the highest level since Jan-18. Foodstuffs came in at 0.85% m/m and explained 48.1% of headline monthly inflation, while transportation also posted a strong increase of 0.45% m/m (22.2% incidence). This was explained by supply-side shocks such as climate events and landslides that blocked some vital roads. However, core inflation remained at comfortable levels as most measures stand very close to the 3% target. Although our current estimate for inflation stands at 3.5%, we acknowledge that temporary effects along with the FX performance may put some upside pressure on our forecast.

10 Equity strategy

Despite our neutral position on a regional basis, our 2019E year-end target for the COLCAP index remains unchanged at 1,720 points (consistent with a still positive view on local equities). From a bottom-up perspective and considering forward trading multiples, the local market remains attractive. The Colombian equity market currently trades at a 12-month forward of 14.3x P/E and 7.0x EV/EBITDA, compared to averages of 18.9x and 8.2x, respectively, over the last three years. Levels remain one standard deviation below historical levels.

Regarding asset selection, we are making a slight change in our equity strategy as we are expecting a weak 2Q19 for Cementos Argos (we have removed this name from our top picks). We reiterate that our equity strategy continues to rely primarily on the banking sector. We are expecting another strong quarter for key banks in 2Q19 as we estimate double-digit growth in net earnings when comparing to the same period of 2018 (Bancolombia already reported strong results – see the next page where we refer to Bancolombia in our top picks section). When looking at preliminary results for May, trends look positive and consistent with key themes of our thesis (loan growth, asset quality and higher profitability). In fact, loan growth at the system level closed at 7.5% y/y in May-19, compared to a level of 4.4% y/y reported in Sep-18. Growth continues to be led by the retail segment, but we continue to expect a gradual recovery in the corporate segment. In addition, key asset quality indicators showed an improvement for the system. NPL growth reached single digits for the first time since Apr-12, while the NPL ratio at the system level is currently placed at 3.56%, compared to a level of 3.70% at the end of Sep-18. Finally, quarterly ROAE reached 13.9% in May-19, which is more than 100 bps higher than it was in the same period of 2018. Going forward, we expect further normalization of cost of risk as provisions on key corporate cases have started to fade and domestic demand has shown signs of strength in Colombia. Finally, we reiterate that our ideal vehicles to get exposure to the banking system are Davivienda and Bancolombia, which currently trade near 1.3x-1.4x P/BV 2020E.

We maintain our view of a slow recovery in the Colombian cement sector (in terms of prices and quantities) during 2019. Cement dispatches have posted a 2.1% LTM increase, while prices have increased 7.1% YTD, above our 4.0% estimate. We highlight that this is the first simultaneous increase since 2015. Furthermore, we highlight that prices are still below import parity, which could make further price increases possible. We highlight a positive dynamic in the civil works segment, with the close of another 4G project. In the construction sector, there are early signs of improvement. The decline in housing inventory and the deceleration in the decrease of licenses are positive, in our view. However, we acknowledge that inventories remain high. Meanwhile, in the cement sector, changes in the industry from the entrance of Ecocementos (expected in 4Q19) could put an end to the tailwinds (price and volume increases) in Colombia. We believe that market share losses with pressured margins due to high energy prices are a concern at the company level. Please note that CLH posted a 14.1% EBITDA margin in Colombia in 2Q19, and it is not the price leader. Therefore, we are concerned about Cemargos’ 2Q19 margins given that it is the price leader. Moreover, a rainy season in the US should drive negative results for the company. For these reasons, we are removing Cemargos from our top picks despite our view of a slow recovery in the Colombian construction sector.

Finally, private consumption fundamentals remain resilient, and we maintain our bet on Nutresa as part of our top picks.

11 P/E Forward (12-month rolling) EV/EBITDA Forward (12-month rolling)

28 11 26 24 10 22 9 20 18 8 16 14 14.3x 7 12 7.0x 10 6 Aug-16 Aug-17 Aug-18 Aug-19 Aug-16 Aug-17 Aug-18 Aug-19 Source: Company Reports, Credicorp Capital, & Bloomberg

12 Top Picks Colombia

Top Picks Colombia

Davivienda (BUY; TP: COP 42,000). We are maintaining Davivienda in our Top Picks. We recently released a new update on the bank, in which we reiterated our BUY rating (see report). Our positive view on the bank is mainly supported by: i) higher expected loan growth in Colombia compared to the industry average for the region (12.1% y/y vs 8.8% y/y for 2019E), ii) better trends in asset quality compared to prior years on the back of lower provision expenses in key corporate cases and an improvement of the retail segment, particularly in Colombia, iii) recent developments on the digital front related to new products that have a higher contribution to the total sales of the bank (27.0% of total sales currently come from digital channels vs 1.0% in 1Q18), iv) ROAE that is expected to improve by at least 100 bps in 2020E, compared to 2019E and v) the fact that our TP has an implicit valuation of a conservative 1.5x P/BV 2019E and that shares look attractive when adjusting P/BV for value generation in 2020E.

Bancolombia (HOLD; TP: COP 43,000). In addition to similar trends in loan growth and lower provision expenses in Colombia when compared to Davivienda, we believe that Bancolombia will post a better operating/financial performance mainly driven by: i) its efforts on OPEX that should lead to a cost-to-income ratio of 48.6% in 2019E, compared to 50.1% in 2018 and ii) its focus on the consumer segment, in which we expect the bank to grow by more than 15.0% y/y, compared to ~12.0% y/y for the industry. Regarding 2Q19 results, financials for Bancolombia were strong as earnings advanced 58.2% y/y and were 26.1% above our expectations. Provision expenses declined 16.1% y/y as the normalization of key corporate cases has started to materialize. Going forward, we expect profitability to improve; this seems particularly positive when considering current valuations below 1.5x P/BV 2020E.

Nutresa (BUY; TP: COP 31,900) We continue to be optimistic about the company’s performance in the mid term. 1H19 results left us with a more positive view on growth; however, there are still some challenges in terms of margin improvement. We maintain our thesis on Nutresa that is based on: (i) the volume growth trend, which has already shown a recovery, leveraging on the company’s leading position in its core categories under a more favorable scenario for consumption in Colombia; (ii) increases in prices due to innovation, sales mix and specific price increases, (iii) a favorable scenario for commodities and (iv) the turnaround story in the underperforming segments of recent years: TMLUC and El Corral.

Colombia - Top Picks

Colombian Picks Last Target Total Mkt. P/E FV/EBITDA P/BV Div Yield Price Price Upside Return (USD mn) 2019E 2020E 2019E 2020E LTM 2019E Sector Davivienda 39,400 42,000 7% 9% 5,494 11.7 9.7 nm nm 1.6 2.0% Banks Bancolombia 40,100 43,000 7% 10% 11,660 12.1 10.2 nm nm 1.6 2.6% Banks Nutresa 24,900 31,900 28% 30% 3,295 16.5 14.4 9.0 8.2 1.4 2.3% Food & Beverages Colombian Picks a 14% 16% 20,449 13.4 11.4 9.0 8.2 1.5 2.3% COLCAP 1,503 1,720 14% 19% 93,369 14.8 13.0 7.5 7.0 0.9 4.9%

Sources: Bloomberg, Company Reports and Credicorp Capital a Simple average, excluding Market Capitalization

13 Peru We take a more defensive stance amid external and domestic risks

Economic growth remains relatively weak amid signs of softening domestic Economic growth demand. The monthly indicator of national production grew 0.63% y/y in May, below disappointed again in market expectations (Reuters: 1.2%). With this result, economic activity expanded 1.5% May, mainly due to y/y YTD through May-19 and 2.6% y/y over the past 12 months. Regarding its the contraction of composition, primary sectors contracted 4.7% y/y, mainly on fishing, primary resource primary sectors. manufacturing, fuels production and mining. On the other side, non-primary sectors rose 2.4% y/y supported by commerce and total services (+3.0% and +3.4% y/y, respectively), while construction fell 0.3% y/y (due to a 13.4% decline in public investment from the general government) and non-primary manufacturing contracted 0.2%.

Early activity indicators continued signaling a moderate recovery in June; however, sustained higher growth would be needed to reach our forecast for 2019. After rising 4.3% y/y in May, domestic cement consumption expanded 11.9% in June, accelerating its We saw positive growth pace vs 1Q19 as well. This trend should help explain better 2Q19 financial results signals in cement & at cement companies like Pacasmayo and Unacem. Likewise, public investment by the construction again, general government expanded 16% y/y, apparently confirming a long-awaited recovery, but 2H19 growth and electricity production grew 3.7% y/y in June (maintaining the pace of recent months). forecasts look All in, our estimates suggest that overall economic activity grew ~2% y/y in June, so GDP challenging. would have grown ~1.7% y/y in 1H19. Therefore, the economy needs to expand ~4.3% y/y in 2H19 to achieve our 3.0% GDP growth forecast for 2019.

Downside risks persist, weighing on business confidence and potentially impacting economic activity and valuations. The external and domestic risks that weighed on Commodity price local equities in 1H19 could continue in the second half of the year. On the external risks could persist front, uncertainty persists on the short-term direction of base metal prices. into 2H19, and Regarding the trade stand-off between the US and China, the countries’ positions still increased political appear to be far away from each other, and, since geopolitical considerations have mixed noise may impact with strictly trade issues, it is likely that a definitive resolution is still months away, leading business confidence to metal price volatility. in upcoming months. On the domestic front, the possibility of earlier general elections also brings political and economic policy uncertainty going forward. Many scenarios could unfold due to President Vizcarra’s constitutional reform proposal to Congress, which is very popular (according to the latest Ipsos poll, 75% of citizens support it). If Congress ultimately passes this bill (and it is then ratified by referendum), general elections will be held in April 2020, and we should know who the presidential candidates are by the start of next year. All in, companies could choose to delay some spending and investment The Central Bank decisions in 2H19 until a clearer view on what lies ahead in terms of economic policy reinforced its orientation emerges. accommodative stance, cutting its In this context, the Central Bank has recently reinforced its accommodative stance. key rate by 25 bps. 12-month headline and core inflation fell again in July, reaching 2.1% and 2.2%, respectively. With inflation and inflation expectations trending downwards and concerns that domestic demand could continue softening during 2H19, the Central Bank (BCRP) cut its key policy rate by 25 bps from 2.75% to 2.50% on Thursday. In its official statement, the BCRP called attention to external risks and said there is a possibility that domestic demand could grow less than expected. Based on the abovementioned factors, we expect the BCRP to make an additional 25-bps reduction, taking its key policy rate to 2.25%.

14 Peru Strategy

In July, the Lima Stock Exchange retreated 3.8% in USD and 3.2% in PEN, underperforming the MSCI Latam as deteriorating expectations on the trade stand- off between the US and China hit base metal prices. The correction was mainly driven by mining companies across the board as copper (-1.5%), zinc (-6.0%) and tin (-8.1%) prices were impacted by the abovementioned factor. At the end of the month, President Vizcarra’s proposal to shorten by one year both his term and that of Congress magnified the negative market reaction.

We maintain our Underweight recommendation for Peru as political uncertainty escalated recently and local economic activity is still subdued. Cement consumption We maintain our surged way above expectations in June (+11.9% y/y), as did fishing production (+14.8% Underweight y/y); however, mining production (-2.6% y/y) was dragged down mainly by lower precious recommendation for and base metal output, while manufacturing was basically flat (+0.5% y/y). Furthermore, Peru as both external 2H19 economic activity may be affected by political uncertainty related to the possibility of and domestic risks earlier elections as investment decisions and spending could be postponed. continue weighing on local equities. The recent market correction has opened up some interesting entry points. With this in mind, we believe that companies with strong fundamentals (IFS) and those exposed to non-discretionary consumption (InRetail and Alicorp) are very attractive at current valuations. Additionally, we favor utilities because of their defensive characteristics in the current environment. Luz del Sur offers low downside risk due to expectations about the sale of Sempra’s controlling stake, and Engie still has room for improvement while offering a steady dividend yield. Cement companies benefited from better volumes in 2Q19 thanks to stronger consumption in May and June; however, going forward, volumes could be impacted by low progress on key private infrastructure projects and political uncertainty.

International trade war turmoil impacted forward multiples. Local stocks trade at a We highlight our strong discount, slightly more than one standard deviation. At 12.5x 12M forward preference for non- P/E, companies under our coverage are trading at a ~17.2% discount against the two-year discretionary historical average (corrected for the significant losses in Buenaventura). Likewise, at 6.4x, consumption and the 12M forward EV/EBITDA is at a 20.0% discount vs the five-year historical average. utilities stocks. On an ex-mining companies basis, the EV/EBITDA multiple seems fairly priced, but the P/E multiple still has a ~6.0% discount vs the historical average. Mining companies deepened their trading discounts below historical averages, affected by depressed metal prices. On the other hand, stocks linked to domestic demand are trading close to their historical average in terms of EV/EBITDA multiples and with a slight discount in terms of P/E multiples.

P/E Forward (12-month rolling) * FV/EBITDA Forward (12-month rolling) *

26 12 24 11 22 10 20 9 18

16 8

14 12.5x 7 6.4x

12 6 Aug-14 Aug-15 Aug-16 Aug-17 Aug-18 Aug-19 Aug-14 Aug-15 Aug-16 Aug-17 Aug-18 Aug-19 Source: Company Reports, Credicorp Capital, & Bloomberg *Mean in the chart considers the last 2 years.

15 Top Picks Peru

InRetail (BUY; T.P.: USD 43.80). We maintain our strong conviction on the name as the We continue to see new guidance of ~30% growth in EBITDA for Pharma and ~15% growth in EBITDA for upside potential in Food seems achievable. Growth opportunities in Food are coming from the new formats InRetail in the short Economax (cash & carry) and Mass (hard discounter), which reached ~7% and ~3%, and medium terms as respectively, of total food sales in 1Q19. Also, we believe that Inkafarma Express will synergies from allow InRetail to continue to gain market share in the traditional channel and that there is vertical integration room to improve margins due to synergies from vertical integration and store maturation. are yet to be fully All in, we believe that InRetail has a strong positioning in the Peruvian market and should realized. be able to continue to expand it.

Ferreycorp (BUY; T.P.: PEN 3.00). Ferreycorp revenues increased at a healthy pace in 1H19 on the back of a growing spare parts & services (SP&S) business line, deliveries of equipment for mining units for contracts signed in 2018 and sales to the construction sector. We believe Ferreycorp maintains attractive medium-term fundamentals. It will provide a fleet of CAT trucks of 320 MT and other types of equipment for the Quellaveco mining project; also, for a five-year period, it will provide specialized support to this Anglo We expect mining American project (total value of the contract is USD 500mn, above our expectations). In investment to post addition, Ferreycorp has a USD 100mn contract with the Mina Justa project of Minsur to expansions of 23% in deliver CAT machines in 2019 and 2020. As such, Ferreycorp has locked in strong growth 2019 and 17% in rates in sales of new machinery until at least 2021. Additionally, the sales of spare parts 2020. and services should continue to grow, albeit at a more moderate rate, providing more stability to the company’s overall revenues. These positive factors will keep driving 2019 results, and we believe this impact is not yet priced in at current price levels of the company’s stock. All in all, Ferreycorp is positioned to be one of the top performers in this mining investment upcycle. .

Peru - Top Picks

Peruvian Picks Last Target Total Mkt. P/E FV/EBITDA P/BV Div Yield Price Price Upside Return (USD mn) 2019E 2020E 2019E 2020E LTM 2019E Sectors InRetail 35.99 43.80 22% 22.6% 3,700 26.6 18.1 13.0 11.9 3.0 0.9% Retail Ferreycorp 2.11 3.00 42% 49.1% 608 7.0 7.3 6.5 6.2 1.0 6.9% Materials Peruvian Picks a 32% 35.9% 4,308 16.8 12.7 9.7 9.0 2.0 3.9% S&P/BVL 19,397 23,400 21% 23% 35,066 14.2 12.3 8.9 7.3 1.9 2.8% a Simple average, excluding Market Capitalization, IFS share price in USD Source: Company Reports, Bloomberg and Credicorp Capital

16 Valuation Summary

August 2019

17 Chile

ADTV P/E FV/EBITDA P/BV Div Yield. ROAE ROAA Company Sector Px Last Px Target Rating Mkt. Cap Local ADR 2019E 2020E 2019E 2020E LTM 2019E 2020E 2019E 2020E 2019E 2020E AESGener Utilities 167 190 HOLD 1,984 1.6 7.7 8.0 6.5 6.1 0.7 14.5% 12.8% 9.7% 9.3% 3.2% 2.9% Aguas-A Utilities 386 390 UPERF 3,146 2.9 17.4 16.4 9.8 9.4 3.7 6.0% 6.3% 22.4% 23.3% 7.5% 7.7% Andina-B Food & Beverages 2,380 2,880 HOLD 3,037 4.3 0.4 17.4 15.3 8.3 7.8 2.7 4.1% 4.6% 15.4% 16.6% 6.0% 6.6% AntarChile Conglomerates 7,246 13,900 BUY 4,691 0.8 7.2 6.6 5.2 5.3 0.7 5.7% 5.4% 8.8% 9.1% 2.5% 2.6% Banco de Chile Banks 99 105.0 HOLD 14,708 8.0 2.1 15.8 14.5 nm nm 2.9 3.4% 3.2% 18.4% 18.7% 1.7% 1.7% Banco Santander Banks 49.7 56.0 BUY 13,416 7.7 8.6 15.5 14.0 nm nm 3.0 3.7% 3.8% 18.0% 18.5% 1.5% 1.5% BCI Banks 43,056 49,100 HOLD 8,626 3.5 13.2 11.1 nm nm 1.7 2.2% 2.5% 12.3% 13.7% 1.0% 1.1% Besalco Construction 560 745 BUY 461 0.4 20.0 17.6 8.6 7.8 1.7 2.7% 3.0% 8.2% 8.9% 2.2% 2.4% CCU Food & Beverages 9,503 9,530 HOLD 4,943 3.6 5.7 21.2 19.0 10.6 9.9 3.3 5.1% 2.8% 12.6% 13.7% 7.2% 7.8% CMPC Pulp & Paper 1,550 2,100 HOLD 5,914 6.2 109.2 37.4 8.4 7.4 0.7 2.5% 0.7% 0.6% 1.8% 0.3% 0.9% Colbun Utilities 125.0 160.0 BUY 3,133 2.2 11.0 11.1 6.1 6.4 0.8 13.4% 7.1% 7.7% 7.8% 4.2% 4.2% Concha y Toro Food & Beverages 1,381 1,520 HOLD 1,450 1.3 15.9 15.8 11.4 10.6 1.9 2.4% 3.7% 11.0% 10.4% 5.9% 5.7% Copec Pulp & Paper 6,049 7,600 HOLD 11,611 7.0 17.5 17.6 8.2 7.8 1.1 3.7% 2.7% 5.8% 5.6% 2.6% 2.6% Embonor-B Food & Beverages 1,400 1,980 BUY 979 0.6 13.9 13.1 7.4 7.0 2.1 5.0% 5.2% 13.6% 13.7% 6.8% 6.9% Enel Americas Utilities 113.7 120.0 HOLD 9,594 14.0 10.9 9.3 7.3 4.6 4.1 2.2 6.3% 6.8% 15.1% 15.0% 4.6% 5.6% Enel Chile Utilities 60.3 74.0 HOLD 5,934 5.2 1.8 13.7 8.9 6.0 5.5 1.2 6.2% 5.0% 8.5% 12.6% 3.9% 5.9% Engie Chile Utilities 1,225.0 1,450.0 BUY 1,783 2.0 10.3 9.7 5.5 5.2 0.9 4.3% 9.8% 8.3% 8.5% 5.0% 5.3% Entel Telecom & IT 6,070 6,550 HOLD 2,621 2.2 35.6 26.8 7.8 7.2 1.4 0.0% 0.8% 4.1% 5.3% 1.4% 1.8% Falabella Retail 4,260.1 5,400.0 HOLD 14,996 16.3 19.2 16.1 12.2 10.5 2.3 1.4% 2.1% 10.3% 11.4% 3.6% 4.1% Forus Retail 1,520 2,310 BUY 557 0.6 14.9 13.6 8.5 7.8 1.8 2.6% 2.6% 11.8% 12.0% 10.5% 10.8% Habitat Financials 932 1,260 BUY 1,314 0.2 9.5 8.4 6.4 5.9 2.5 7.2% 7.2% 25.8% 26.8% 20.4% 21.3% Hites Retail 463 500 HOLD 244 0.2 16.0 12.5 11.0 9.5 1.3 2.4% 3.1% 7.8% 9.3% 3.2% 3.7% ILC Conglomerates 10,714 14,200 BUY 1,518 1.2 10.3 8.9 nm nm 1.5 4.7% 4.3% nm nm nm nm Itau Corpbanca Banks 5.31 6.10 HOLD 3,884 2.8 0.1 15.2 13.7 nm nm 0.8 1.8% 1.9% 5.3% 5.7% 0.6% 0.6% Latam Airlines Transport 6,250 7,330 HOLD 5,842 5.7 4.0 18.1 15.0 7.7 7.1 1.4 0.8% 1.9% 6.6% 7.5% 1.5% 1.7% Masisa Materials 41 43 HOLD 462 0.3 44.6 122.7 10.0 11.4 0.5 2.4% 1.1% 1.0% 0.4% 0.8% 0.3% Parque Arauco Real Estate 1,905 1,970 HOLD 2,423 1.9 17.5 20.5 18.4 17.6 4.9 3.1% 3.1% 10.8% 8.8% 4.2% 3.4% Quiñenco Conglomerates 1,868 2,135 HOLD 4,309 0.9 18.0 17.4 nm nm 1.0 5.3% 5.7% nm nm nm nm Ripley Retail 480 663 HOLD 1,354 1.4 12.7 11.5 9.1 8.2 1.0 4.3% 4.5% 7.6% 8.2% 2.5% 2.7% Salfacorp Cement & Construction 705 980 BUY 447 0.6 12.5 11.0 17.9 15.4 0.8 2.4% 2.4% 6.6% 7.2% 2.3% 2.5% Security Conglomerates 256 330 HOLD 1,346 0.9 8.9 8.3 nm nm 1.3 5.3% 6.3% 13.7% 13.6% 0.9% 0.9% SK Industrial 1,200 1,373 BUY 1,852 0.3 14.9 12.1 8.3 7.2 1.4 3.6% 5.1% 9.0% 10.6% 3.3% 3.9% SMU Retail 172 247 BUY 1,397 0.9 19.8 16.2 9.1 8.6 2.1 0.0% 0.0% 6.8% 7.8% 2.8% 3.5% Sonda Telecom & IT 900 1,070 HOLD 1,117 1.2 31.7 21.2 10.2 8.6 1.6 0.7% 1.7% 4.9% 7.1% 2.6% 3.6% SQM-B Materials 18,999 32,000 BUY 7,468 14.3 31.5 26.9 24.3 11.7 11.0 3.6 5.6% 3.3% 12.9% 14.7% 6.1% 6.8% Chile Sample 4,780 6,150 144,943 131.1 15.9 14.0 8.2 8.6 1.5 4.0% 3.8% 9.3% 10.4% 1.9% 2.2%

Source: Company Reports, Credicorp Capital, & Bloomberg. For LATAM, EV/EBITDAR

18 Colombia

ADTV P/E FV/EBITDA P/BV Div Yield. ROAE ROAA Company Sector Px Last Px Target Rating Mkt. Cap Local ADR 2019E 2020E 2019E 2020E LTM 2019E 2020E 2019E 2020E 2019E 2020E Avianca Transport 1,635 2,160 UPERF 491 0.3 0.5 nm nm 4.8 4.5 0.4 0.0% 0.0% -2.3% -5.1% -0.4% -0.7% Bancolombia Banks 40,100 43,000 HOLD 11,673 6.3 14.9 12.1 10.2 nm nm 1.6 2.6% 2.8% 12.4% 13.6% 1.4% 1.5% BVC Financials 11,980 13,300 BUY 214 0.2 13.2 12.9 8.0 7.8 1.5 6.0% 5.2% 11.5% 11.4% 8.9% 8.9% Canacol Oil & Gas 12,480 10,680 HOLD 645 0.2 1.3 nm 5.8 2.9 2.7 2.8 0.0% 0.0% 35.2% 28.0% 12.1% 11.5% Cemargos Cement & Construction 7,200 9,900 BUY 2,879 2.1 41.9 41.0 10.3 10.2 1.3 3.3% 3.4% 2.9% 3.1% 1.3% 1.3% CLH Cement & Construction 4,285 5,700 HOLD 722 0.4 11.4 9.2 6.9 6.4 0.4 0.0% 0.0% 3.9% 4.7% 2.0% 2.5% Davivienda Banks 39,400 42,000 BUY 5,500 1.3 11.7 9.7 nm nm 1.6 2.0% 2.4% 12.8% 14.0% 1.3% 1.5% Ecopetrol Oil & Gas 2,860 3,580 HOLD 34,367 9.9 19.8 8.4 6.8 4.2 3.8 2.3 7.7% 7.7% 23.9% 26.5% 10.8% 13.1% Éxito Retail 17,200 16,150 HOLD 2,283 1.8 13.4 12.3 7.1 6.5 1.2 1.8% 3.6% 7.3% 8.5% 0.9% 1.0% Grupo Argos Conglomerates 16,020 21,500 HOLD 3,951 1.9 23.9 18.8 9.5 8.4 0.9 2.1% 2.2% 3.6% 4.5% 1.2% 1.6% Grupo Aval Banks 1,220 1,400 HOLD 8,158 1.6 1.2 9.8 8.5 nm nm 1.7 4.0% 4.3% 15.4% 16.7% 1.7% 1.9% Grupo Sura Conglomerates 32,500 39,100 HOLD 5,476 3.8 11.8 11.0 nm nm 0.8 1.6% 1.7% 6.3% 6.4% 2.2% 2.2% Nutresa Food & Beverages 24,900 31,900 BUY 3,367 1.1 16.8 14.7 8.9 8.1 1.4 2.3% 2.5% 5.3% 5.9% 3.1% 3.4% Colombia Sample 1,503 1,720 93,542 35.3 14.7 13.0 7.5 6.9 0.9 4.9% 5.3% 12.1% 14.4% 2.5% 3.0%

Source: Company Reports, Credicorp Capital, & Bloomberg

19 Peru

ADTV P/E FV/EBITDA P/BV Div Yield. ROAE ROAA Company Sector Px Last Px Target Rating Mkt. Cap Local ADR 2019E 2020E 2019E 2020E LTM 2019E 2020E 2019E 2020E 2019E 2020E Aceros Arequipa Materials 0.69 0.85 BUY 298 0.0 5.2 6.1 3.7 4.0 0.5 7.0% 6.9% 9.4% 7.6% 4.9% 3.9% Alicorp Food & Beverages 9.95 13.00 HOLD 2,446 0.9 14.7 12.8 11.1 10.1 2.9 2.9% 3.4% 16.7% 17.5% 6.0% 6.7% Cementos Pacasmayo Cement & Construction 5.8 8.1 HOLD 738 0.2 0.1 17.1 14.7 8.5 8.0 1.6 5.1% 5.8% 9.4% 10.8% 5.1% 5.9% Cerro Verde Mining 19.30 28.30 BUY 6,655 0.1 10.4 10.2 4.9 5.0 1.3 2.6% 2.9% 11.0% 10.4% 7.8% 7.5% Enel Generacion Peru Utilities 2.5 2.6 BUY 2,065 0.1 12.7 12.2 7.5 7.2 2.3 5.1% 5.1% 17.9% 17.5% 12.7% 12.8% Enel Distribucion Peru Utilities 6.20 6.85 HOLD 1,171 0.1 10.4 9.9 6.9 6.5 2.0 3.9% 4.0% 17.1% 16.3% 8.1% 7.9% Engie Peru Utilities 6.9 7.8 HOLD 1,209 0.1 11.1 10.4 6.6 6.4 1.1 5.0% 6.3% 9.6% 9.8% 5.0% 5.3% Ferreycorp Materials 2.11 3.00 BUY 620 0.4 7.1 7.5 6.5 6.2 1.0 6.8% 9.8% 12.8% 11.6% 5.6% 5.2% Graña y Montero Cement & Construction 1.9 2.5 HOLD 393 0.1 0.4 13.2 11.1 5.3 4.7 0.6 0.0% 3.2% 4.5% 5.2% 1.2% 1.5% IFS Conglomerates 38.60 49.00 HOLD 4,736 2.3 11.2 10.3 nm nm 2.5 4.1% 4.9% 18.9% 18.7% 2.1% 2.1% InRetail Retail 36.0 43.8 BUY 3,650 2.0 26.2 17.9 12.9 11.7 3.0 0.9% 0.5% 10.9% 14.4% 3.4% 4.7% Luz del Sur Utilities 14.32 13.75 HOLD 2,062 0.2 16.4 15.7 11.1 10.5 2.6 4.2% 4.3% 15.6% 15.5% 7.1% 7.0% Nexa Resources Mining 7.3 14.2 BUY 1,037 1.2 1.2 8.7 4.6 1.0 0.8 0.4 -6.7% -6.9% 4.8% 8.6% 2.1% 3.8% Minsur Mining 1.55 1.95 BUY 1,322 0.2 26.1 20.4 8.0 8.1 1.1 0.0% 0.0% 3.9% 4.8% 2.0% 2.5% Unacem Cement & Construction 2.3 3.5 BUY 1,237 0.3 8.8 8.3 6.2 6.2 1.0 2.4% 2.3% 10.9% 10.6% 4.5% 4.8% Volcan Mining 0.46 1.00 HOLD 2,038 0.4 24.0 22.8 8.9 8.6 3.1 1.9% 1.7% 12.0% 11.8% 3.7% 3.8% Peru Sample 19,397 23,400 34,898 27.8 14.1 12.3 8.9 7.2 1.9 2.8% 3.1% 12.1% 12.2% 4.3% 5.7% Source: Company Reports, Credicorp Capital, & Bloomberg

20 Economic Forecasts

August 2019

21 Economic Forecasts

CHILE National Accounts (YoY) 2015 2016 2017 2018 2019F 2020F Current GDP (USDmm) 244,417 250,266 277,184 299,148 297,643 318,123 GDP (%) 2.3 1.3 1.5 4.0 2.5 3.1 Domestic Demand (% v ar.) 2.5 1.3 3.1 4.7 3.2 3.4 Total Consumption (% v ar.) 2.6 2.9 2.7 3.7 3.1 3.2 Inv estment / GDP 23.8 22.7 21.1 21.3 21.9 22.1 CPI 4.4 2.7 2.3 2.6 2.6 3.0 Reference rate (end of y ear) 3.50 3.50 2.50 2.75 2.00 2.50 Ex change rate (end of y ear) 709 667 615 696 690 675 Ex change rate (av g.) 655 677 649 640 690 680 Fiscal Balance (% GDP) -2.2 -2.7 -2.8 -1.7 -2.4 -2.1 Foreign Reserves (USDmm) 38,643 40,494 38,983 39,861 39,912 41,908 Source: INE, BCCh, Dipres & Credicorp Capital Estimates

PERU National Accounts (YoY) 2015 2016 2017 2018 2019F 2020F Current GDP (USDmm) 191,517 194,745 214,332 225,259 225,500 235,500 GDP (%) 3.3 4.0 2.5 4.0 3.0 3.5 Domestic Demand (% v ar.) 2.9 1.1 1.4 4.3 3.1 3.7 Total Consumption (% v ar.) 4.9 2.8 2.2 3.6 3.4 3.4 Inv estment / GDP 23.8 22.2 20.9 21.4 21.5 22.0 CPI 4.4 3.2 1.4 2.2 2.3 2.5 Ov ernight interest rate (end of y ear) 3.75 4.25 3.25 2.75 2.75 2.75 Ex change rate (end of y ear) 3.41 3.36 3.24 3.37 3.35-3.40 3.35-3.40 Ex change rate (av g.) 3.19 3.38 3.26 3.29 3.30-3.35 3.35-3.40 Fiscal Balance (% GDP) -2.1 -2.6 -3.1 -2.5 -2.0 -2.0 Foreign Reserves (USDmm) 61,485 61,686 63,621 60,121 66,500 67,300 Source: INEI, BCR & Credicorp Capital Estimates

COLOMBIA National Accounts (YoY) 2015 2016 2017 2018 2019F 2020F Current GDP (USDmm) 293,321 283,148 314,458 330,083 342,149 370,470 GDP (%) 3.0 2.1 1.4 2.7 3.3 3.2 Domestic Demand (% v ar.) 2.4 1.2 1.2 3.8 4.0 3.4 Total Consumption (% v ar.) 3.4 1.6 2.4 3.9 4.0 3.3 Inv estment / GDP 23.8 23.2 22.2 22.4 22.6 22.6 CPI 6.8 5.8 4.1 3.2 3.5 3.2 Ov ernight interest rate (end of y ear) 5.75 7.50 4.75 4.25 4.25 4.75 Ex change rate (end of y ear) 3,175 3,002 2,984 3,249 3,150 3,050 Ex change rate (av g.) 2,760 3,051 2,951 2,957 3,250 3,100 Fiscal Balance (% GDP) -3.0 -4.0 -3.6 -3.1 -2.6 -2.4 Foreign Reserves (USDmm) 46,741 46,683 47,637 48,402 50,402 51,507 Source: DANE, BanRep, Bloomberg & Credicorp Capital Estimates

22 Important Disclosures

This research report was prepared by Credicorp Capital Peru S.A and/or Credicorp Capital Colombia Sociedad Comisionista de Bolsa and/or Credicorp Capital S.A. Corredores de Bolsa, companies authorized to engage in securities activities in Peru, Colombia and Chile, respectively and indirect subsidiaries of Credicorp Capital Ltd. (jointly referred to as “Credicorp Capital”). None of the companies jointly referred to as Credicorp Capital are registered as broker-dealers in the United States and, therefore, they are not subject to U.S. rules regarding the preparation of research reports and the independence of research analysts. This research report is provided for distribution only to “major U.S. institutional investors” in reliance on the exemption from registration provided by Rule 15a-6 of the U.S. Securities Exchange Act of 1934, as amended (the “Exchange Act”). Any U.S. recipient of this research report wishing to effect any transaction to buy or sell securities or related financial instruments based on the information provided in this research report can do so only through Credicorp Capital Securities Inc., a registered broker-dealer in the United States. Under no circumstances may a U.S. recipient of this research report effect any transaction to buy or sell securities or related financial instruments directly through Credicorp Capital. CCSI or any of its representatives are not involved in any way in the preparation, development, or supervision of the research report and does not have any influence whatsoever over the research content. Any analyst whose name appears on this research report is not registered or qualified as a research analyst with the Financial Industry Regulatory Authority (“FINRA”) and is not a registered representative of Credicorp Capital Securities Inc. and, therefore, is not subject to applicable restrictions under FINRA Rules on communications with a subject company, public appearances and trading securities held by a research analyst account.

A. Analyst Disclosures The functional job title of the person(s) responsible for the recommendations contained in this report is Equity Research Analyst unless otherwise stated on the cover.

Regulation AC - Analyst Certification: Each Equity Research Analyst listed on the front-page of this report is principally responsible for the preparation and content of all or any identified portion of this research report and hereby certifies that with respect to each issuer or security or any identified portion of the report with respect to an issuer or security that the Equity Research Analyst covers in this research report, all of the views expressed in this research report accurately reflect their personal views about those issuer(s) or securities. Each Equity Research Analyst also certifies that no part of their compensation was, is, or will be, directly or indirectly, related to the specific recommendation(s) or view(s) expressed by that Equity Research Analyst in this research report. Each Equity Research Analyst certifies that he or she is acting independently and impartially from the referenced company/shareholders, directors and is not affected by any current or potential conflict of interest that may arise from any of the companies’ activities. Analyst Compensation: The research analyst(s) primarily responsible for the preparation of the content of this research report attest(s) that no part of his or her compensation was, is or will be, directly or indirectly, related to the specific recommendations that he or she expressed in the research report. The equity research analysts responsible for the preparation of this report receive compensation based upon various factors, including the quality and accuracy of research, client feedback, competitive factors, and overall firm revenues. Registration of non-US Analysts: Unless otherwise noted, the non-US analysts listed on the front of this report are employees of one of the companies jointly referred as Credicorp Capital, which are non-US affiliates of Credicorp Capital Securities Inc., a SEC registered and FINRA member broker-dealer. Equity Research Analysts employed by the companies jointly referred as Credicorp Capital, are not registered/ qualified as research analysts under FINRA/NYSE rules, are not registered representatives of Credicorp Capital Securities Inc. and may not be subject to NASD Rule 2711 and NYSE Rule 472 restrictions on communications with covered companies, public appearances, and trading securities held by a research analyst account. Please refer to www.credicorpcapital.com for further information relating to research and conflict of interest management.

23 B. Ownership and Material Conflicts of Interest

Other significant financial interests

Credicorp Capital Securities Inc. or its affiliates ´beneficially own´ securities issued by the companies referenced in this report according to the following table:

Type of instruments Equal or less than USD 50,000 Equal or less than USD 500,000Equal or less than USD 1,000,000 More than USD 1,000,000 Other equity securities - Minsur - - AESGener, Banco de Chile, BCI, Cencosud, CMPC, Colbun, Corpbanca, EECL, Enel Chile, Falabella, Ripley, SQM-B, Entel, LATAM Airlines, Debt securities - IFS Bancolombia, Ecopetrol, ETB, Grupo Davivienda Aval, Grupo Sura, Alicorp, Cementos Pacasmayo, Enel Dx Peru, Enel Gx Peru, Engie Peru, Luz del Sur, Milpo, Minsur, Unacem, Volcan. Avianca, Banco de Bogota, Bancolombia, Canacol, Celsia, Derivatives on equity/debt securities Cemargos, Cemex Latam Holdings, Éxito - - Ecopetrol, EEB, Grupo Argos, Grupo Aval, Nutresa. The research analyst(s) primarily responsible for the preparation of the content of this research report or their household members ´beneficially own´ securities issued by the companies referenced in this report according to the following table:

Type of instruments Equal or less than USD 10,000 Equity securities BCI, Ferreycorp, and InRetail Debt securities - Derivatives on equity/debt - securities

C. Compensation and Investment Banking Activities Credicorp Capital Securities Inc. or its affiliates have managed or co-managed a public offering of securities, in the past 12 months, for the following company(ies): Davivienda, ISA, Alicorp, Engie Peru and Luz del Sur. Credicorp Capital Securities Inc. or its affiliates currently have or had, within the past 12 months, the following company(ies) as investment banking client(s): Davivienda, EEB, ISA, Aceros Arequipa, AIH, Alicorp, Buenaventura, Cementos Pacasmayo, Engie Peru, Ferreycorp, Graña y Montero, IFS, InRetail, Luz del Sur, Milpo and Volcan. Credicorp Capital Securities Inc. or its affiliates also have received compensation, within the past 12 months, for investment banking services from the following company(ies): Davivienda, EEB, ISA, Aceros Arequipa, AIH, Alicorp, Buenaventura, Cementos Pacasmayo, Engie Peru, Ferreycorp, Graña y Montero, IFS, InRetail, Luz del Sur, Milpo and Volcan. Credicorp Capital Securities Inc. or its affiliates also expect to receive or intend to seek compensation, in the next 3 months, for investment banking services from the following company (ies): Davivienda, EEB, ISA, Aceros Arequipa, AIH, Alicorp, Buenaventura, Cementos Pacasmayo, Engie Peru, Ferreycorp, Graña y Montero, IFS, InRetail, Luz del Sur, Milpo and Volcan.

D. Other Compensation and Non-Investment Banking Activities Credicorp Capital Securities Inc. or its affiliates currently provide or have provided, within the past 12 months, non-investment-banking securities-related services to the following company(ies): Banco de Chile, BCI, Copec, ItauCorpbanca, EISA, Falabella, Habitat,, Santander, SMU, Hites, Avianca, Banco de Bogota, Bancolombia, BVC, Cemargos, Davivienda, Ecopetrol, EEB, ETB, Exito, Grupo Argos, Grupo Sura, ISA, Nutresa, and Promigas. Credicorp Capital Securities Inc. or its affiliates also have received compensation, within the past 12 months, for non-investment-banking securities-related services from the following company(ies): Banco de Chile, BCI, Copec, ItauCorpbanca, EISA, Falabella, Habitat,, Santander, SMU, Hites, Avianca, Banco de Bogota, Bancolombia, BVC, Cemargos, Davivienda, Ecopetrol, EEB, ETB, Exito, Grupo Argos, Grupo Sura, ISA, Nutresa, and Promigas.

24 Credicorp Capital Securities Inc. or its affiliates currently provides or have provided, within the past 12 months, non-securities-related services to the following company(ies): Banco de Chile, BCI, ItauCorpbanca, Forus, Habitat, LATAM, Santander, SK, Banco de Bogota, Bancolombia, Davivienda, Aceros Arequipa, AIH, Alicorp, Cementos Pacasmayo, Cerro Verde, Enel Dx Peru, Enel Gx Peru, Engie Peru, Ferreycorp, Graña y Montero, Luz del Sur, Milpo, and Unacem. Credicorp Capital Securities Inc. or its affiliates also have received compensation, within the past 12 months, for non-securities services from the following company(ies): Banco de Chile, BCI, ItauCorpbanca, Forus, Habitat, LATAM, Santander, SK, Banco de Bogota, Bancolombia, Davivienda, Aceros Arequipa, AIH, Alicorp, Cementos Pacasmayo, Cerro Verde, Enel Dx Peru, Enel Gx Peru, Engie Peru, Ferreycorp, Graña y Montero, Luz del Sur, Milpo, and Unacem. E. Market Making Cedicorp Capital Securities Inc. or its affiliates act as market maker in the following company(ies): Almendral, Besalco, Invercap, Masisa, Quiñenco, Ripley, Grupo Security, SM SAAM, Enjoy, BVC, EEB, ETB, Alicorp, Cementos Pacasmayo, Engie Energia Peru, Ferreycorp and BVL. F. Rating System Stock ratings are based on the analyst’s expectation of the stock’s total return during the twelve to eighteen months following assignment of the rating. This view is based on the target price, set as described below, and on the analyst’s opinion, general market conditions and economic developments. Buy: Expected returns of 5 percentage points or more in excess over the expected return of the local index, over the next 12-18 months. Hold: Expected returns of +/- 5% in excess/below the expected return of the local index over the next 12-18 months. Underperform: Expected to underperform the local index by 5 percentage points or more over the next 12-18 months. Under Review: Company coverage is under review. The IPSA, COLCAP and IGBVL indexes are the selective equity indexes calculated by the Bolsa de Comercio de Santiago, the Bolsa de Valores de Colombia, and the Bolsa de Valores de Lima, respectively. In making a recommendation, the analyst compares the target price with the actual share price, and compares the resulting expected return for the IPSA, the COLCAP, and/or the SPBVL indexes, as estimated by Credicorp Capital S.A. Corredores de Bolsa, Credicorp Capital Colombia Sociedad Comisionista de Bolsa, and/or CredicorpCapital Peru S.A, and then makes a recommendation derived from the difference in upside potential between the shares and the respective index. G. Distribution of Ratings

Buy Hold Underperform Restricted / UR

Companies covered with this rating 36% 47% 4% 13%

Compensation for investment banking 40% 30% 33% 0% services in the past 12 months*

*Percentage of investment banking clients in each rating category. H. Price Target Unless otherwise stated in the text of this report, target prices in this report are based on either a discounted cash flow valuation or comparison of valuation ratios with companies seen by the analyst as comparable or a combination of the two methods. The result of this fundamental valuation is adjusted to reflect the analyst’s views on the likely course of investor sentiment. Whichever valuation method is used there is a significant risk that the target price will not be achieved within the expected timeframe. Risk factors include unforeseen changes in competitive pressures or in the level of demand for the company’s products. Such demand variations may result from changes in technology, in the overall level of economic activity or, in some cases, in fashion. Valuations may also be affected by changes in taxation, in exchange rates and, in certain industries, in regulations. Investment in overseas markets and instruments such as ADRs can result in increased risk from factors such as exchange rates, exchange controls, taxation, and political and social conditions. This discussion of valuation methods and risk factors is not comprehensive – further information is available upon request.

25 II.ADDITIONAL DISCLOSURES

This product is not for retail clients or private individuals.

The information contained in this publication was obtained from various publicly available sources believed to be reliable, but has not been independently verified by the companies jointly referred as Credicorp Capital, therefore they do not warrant the completeness or accuracy of such information and does not accept any liability with respect to the accuracy or completeness of such information, except to the extent required by applicable law. This publication is a brief summary and does not purport to contain all available information on the subjects covered. Further information may be available on request. This report may not be reproduced for further publication unless the source is quoted. This publication is for information purposes only and shall not be construed as an offer or solicitation for the subscription or purchase or sale of any securities, or as an invitation, inducement or intermediation for the sale, subscription or purchase of any securities, or for engaging in any other transaction. This publication is not for private individuals.

Any opinions, projections, forecasts or estimates in this report are those of the author only, who has acted with a high degree of expertise. They reflect only the current views of the author at the date of this report and are subject to change without notice. The companies jointly referred to as Credicorp Capital have no obligation to update, modify or amend this publication or to otherwise notify a reader or recipient of this publication in the event that any matter, opinion, projection, forecast or estimate contained herein, changes or subsequently becomes inaccurate, or if research on the subject company is withdrawn. The analysis, opinions, projections, forecasts and estimates expressed in this report were in no way affected or influenced by the issuer. The author of this publication benefits financially from the overall success of Credicorp Capital. The investments referred to in this publication may not be suitable for all recipients. Recipients are urged to base their investment decisions upon their own appropriate investigations that they deem necessary. Any loss or other consequence arising from the use of the material contained in this publication shall be the sole and exclusive responsibility of the investor and Credicorp Capital accepts no liability for any such loss or consequence. In the event of any doubt about any investment, recipients should contact their own investment, legal and/or tax advisers to seek advice regarding the appropriateness of investing. Some of the investments mentioned in this publication may not be readily liquid investments. Consequently it may be difficult to sell or realize such investments. The past is not necessarily a guide to future performance of an investment. The value of investments and the income derived from them may fall as well as rise and investors may not get back the amount invested. Some investments discussed in this publication may have a high level of volatility. High volatility investments may experience sudden and large falls in their value which may cause losses. International investing includes risks related to political and economic uncertainties of foreign countries, as well as currency risk.

To the extent permitted by applicable law, no liability whatsoever is accepted for any direct or consequential loss, damages, costs or prejudices whatsoever arising from the use of this publication or its contents.

This report may not be independent of Credicorp Capital’s proprietary interests. Credicorp Capital trades the securities covered in this report for its own account and on a discretionary basis on behalf of certain clients. Such trading interests may be contrary to the recommendation(s) offered in this report

Credicorp Capital (and its affiliates) has implemented written procedures designed to identify and manage potential conflicts of interest that arise in connection with its research business, which are available upon request. The Credicorp Capital research analysts and other staff involved in issuing and disseminating research reports operate independently of Credicorp Capital’s Investment Banking business. Information barriers and procedures are in place between the research analysts and staff involved in securities trading for the account of Credicorp Capital or clients to ensure that price sensitive information is handled according to applicable laws and regulations.

26 Credicorp Capital Securities Inc., is a wholly owned subsidiary of Credicorp Capital Ltd.

Nothing herein excludes or restricts any duty or liability to a customer that Credicorp Capital Securities Inc. have under applicable law. Investment products provided by or through Credicorp Capital Securities Inc. are not insured by the Federal Deposit Insurance Corporation and are not deposits or other obligations of any insured depository institution, may lose value and are not guaranteed by the entity that published the research as disclosed on the front page and are not guaranteed by Credicorp Capital Securities Inc.

Investing in non-U.S. Securities may entail certain risks. The securities referred to in this report and non-U.S. issuers may not be registered under the U.S. Securities Act of 1933, as amended, and the issuer of such securities may not be subject to U.S. reporting and/or other requirements. Rule 144A securities may be offered or sold only to persons in the U.S. who are Qualified Institutional Buyers within the meaning of Rule 144A under the Securities Act. The information available about non-U.S. companies may be limited, and non-U.S. companies are generally not subject to the same uniform auditing and reporting standards as U.S. companies. Securities of some non-U.S. companies may not be as liquid as securities of comparable U.S. companies. Securities discussed herein may be rated below investment grade and should therefore only be considered for inclusion in accounts qualified for speculative investment.

Analysts employed by one of the companies jointly referred to as Credicorp Capital, all of which are non-U.S. broker-dealers, are not required to take the FINRA analyst exam. The information contained in this report is intended solely for certain "major U.S. institutional investors" and may not be used or relied upon by any other person for any purpose. Such information is provided for informational purposes only and does not constitute a solicitation to buy or an offer to sell any securities under the Securities Act of 1933, as amended, or under any other U.S. federal or state securities laws, rules or regulations. The investment opportunities discussed in this report may be unsuitable for certain investors depending on their specific investment objectives, risk tolerance and financial position.

In jurisdictions where Credicorp Capital Securities Inc. is not registered or licensed to trade in securities, or other financial products, transactions may be executed only in accordance with applicable law and legislation, which may vary from jurisdiction to jurisdiction and which may require that a transaction be made in accordance with applicable exemptions from registration or licensing requirements.

The information in this publication is based on sources believed to be reliable, but Credicorp Capital Securities Inc. does not make any representation with respect to its completeness or accuracy. All opinions expressed herein reflect the author's judgment at the original time of publication, without regard to the date on which you may receive such information, and are subject to change without notice.

Credicorp Capital Securities Inc. or its affiliates may have issued other reports that are inconsistent with, and reach different conclusions from, the information presented in this report. These publications reflect the different assumptions, views and analytical methods of the analysts who prepared them. Past performance should not be taken as an indication or guarantee of future performance, and no representation or warranty, express or implied, is provided in relation to future performance.

Credicorp Capital Securities Inc. and any company affiliated with it may, with respect to any securities discussed herein: (a) take a long or short position and buy or sell such securities; (b) act as investment and/or commercial bankers for issuers of such securities; (c) act as market makers for such securities; (d) serve on the board of any issuer of such securities; and (e) act as paid consultant or advisor to any issuer. The information contained herein may include forward-looking statements within the meaning of U.S. federal securities laws that are subject to risks and uncertainties. Factors that could cause a company's actual results and financial condition to differ from expectations include, without limitation: political uncertainty, changes in general economic conditions that adversely affect the level of demand for the company's products or services, changes in foreign exchange markets, changes in international and domestic financial markets and in the competitive environment, and other factors relating to the foregoing. All forward-looking statements contained in this report are qualified in their entirety by this cautionary statement.

Other countries: Laws and regulations of other countries may also restrict the distribution of this report. Persons in possession of this document should inform themselves about possible legal restrictions and observe them accordingly.

27 CONTACT LIST

ANDEAN RESEARCH TEAM SALES & TRADING

Daniel Velandia, CFA Felipe García Head of Research & Chief Economist Head of Sales & Trading [email protected] [email protected] # (571) 339 4400 Ext 1505 # (571) 339 4400 Ext. 1132

EQUITY RESEARCH EQUITY SALES & TRADING

Carolina Ratto Mallie Andre Suaid Head of Equity Research - Retail Head Equities Regional [email protected] [email protected] # (562) 2446 1768

CHILE PERU COLOMBIA CHILE PERU COLOMBIA

Tomás Sanhueza Daniel Córdova Sebastián Gallego, CFA René Ossa Rodrigo Zavala Juan A. Jiménez Head of Equity Research - Consumer & Head of Equity Research Peru Head of Equity Research - Banks Head of Equity Head of Equity - Peru Head of International Equity Sales Transport. [email protected] [email protected] [email protected] [email protected] [email protected] [email protected] # (562) 2446 1751 # (511) 416 3333 Ext 33052 # (571) 339 4400 Ext 1594 # (562) 2651 9324 # (511) 313 2918 Ext 36044 # (571) 339 4400 Ext 1701

Steffania Mosquera German Barousse Renzo Castillo Santiago Castro Ezequiel Fernández Luis Vicente Senior Analyst: Cement & Construction, Vice President Equity Sales Equities Sales International Sales & Trading VP Utilities Senior Analyst: Mining & Utilities Non Bank financials [email protected] [email protected] [email protected] [email protected] [email protected] [email protected] # (562) 2450 1637 # (511) 416 3333 Ext 36167 # (571) 339 4400 Ext 1344 # (562) 2651 9344 # (511) 416 3333 Ext 37854 # (571) 339 4400 Ext 1025 Ursula Mitterhofer Maria Fernanda Luna Credicorp Capital Securities INC Andrés Cereceda Juan Pablo Brosset Daniel Mora Senior Associate Sales & Trading Equities Sales Associate: Pulp & Paper, Materials, Healthcare, Pension Funds Analyst: Cement & Construction Analyst- Banks [email protected] [email protected] [email protected] [email protected] [email protected] # (562) 2450 1613 # (511) 416 3333 Ext 36182 Rafael Solis # (562) 2446 1798 # (511) 416 3333 Ext 36018 # (571) 339 4400 Ext 1609 Institutional Equity Sales Cristóbal Grez Credicorp Capital UK Ltd. [email protected] Joel Lederman Nicolas Erazo Associate Equity Sales # (786) 999 1619 Associate - Retail Analyst - Utilities [email protected] Marilyn Macdonald [email protected] [email protected] # (562) 2450 1629 International Equity Sales David Crummy # (562) 2651 9332 # (571) 339 4400 Ext 1365 [email protected] Equity Sales Trader Ana María Bauzá # (4477) 7151 5855 [email protected] Felipe Navarro Corporate Access # (786) 999 1618 Senior Analyst: Construction, Industrial & Ports [email protected] [email protected] # (562) 2450 1609 # (562) 2450 1688

Macarena Ossa Analyst - Utilities [email protected] # (562) 2450 1694

FIXED INCOME & ECONOMICS RESEARCH FIXED INCOME SALES & TRADING

CHILE PERU COLOMBIA Andrés Nariño Alfredo Bejar Director Sales Offshore Head of International FI Josefina Valdivia Cynthia Huaccha Camilo A. Durán [email protected] [email protected] Head of Fixed Income Fixed Income Associate Macro Analyst # (571) 339-4400 Ext. 1459 # (511) 205 9190 Ext 36148 [email protected] [email protected] [email protected] # (562) 2651 9308 # (511) 416 3333 Ext 37946 # (5511) 339 4400 Ext. 1383 CHILE PERU COLOMBIA

Ignacio Sabelle Guido Riquelme Evangeline Arapoglou Carlos Sanchez Fixed Income Analyst Head of Sales Head of international FI Sales Head of Fixed Income [email protected] [email protected] [email protected] [email protected] # (562) 2651 9368 # (562) 2446 1712 # (511) 416 3333 Ext 36099 # (571) 323 9154

Lorena Palomeque Juan Francisco Mas Andrés Valderrama Gustavo Trujillo Senior Economist Fixed Income Sales Fixed Income Sales Head of Sales [email protected] [email protected] [email protected] [email protected] # (562) 2446 1736 # (562) 2446 1720 # (511) 416 3333 Ext 40352 # (571) 323 9252

Rafael Gaete Natalia Jurado Andrés Agudelo Local Fixed Income Sales Fixed Income Sales Fixed Income Sales [email protected] [email protected] [email protected] # (562) 2651 9336 # (511) 416 3333 Ext 36027 # (571) 339 4400 Ext 1180

Diego Hidalgo Guillermo Arana Emilio Luna Local Fixed Income Sales Fixed Income Sales Fixed Income Sales [email protected] [email protected] [email protected] # (562) 2450 1693 # (511) 313 2902 Ext. 36144 # (571) 339 4400

Lizeth Espiritu Patricio Luza Fixed Income Sales Fixed Income Sales [email protected] [email protected] Credicorp Capital Securities INC # (562) 2450 1619 # (511) 416 3333 Ext. 36168

Carla Tejada Jhonathan Rico Fixed Income Analyst Fixed Income Trader [email protected] [email protected] # (511) 416 3333 Ext. 36143 # 1 (786) 9991614

Ana Lucía Rondón Medina Sales Renta Fija Michael Tafur [email protected] Fixed Income # (511) 416 3333 Ext. 40339 [email protected] # 1 (786) 9991607

28