Equity Research Mexico ALFA Corporate Note January 18, 2019 Focused on strengthening its balance sheet www.banorte.com @analisis_fundam . Through our sum-of-the-parts valuation model, we have set a 2019 PT of MXN$ 29.50, which represents a 5.9x 2019e EV/EBITDA multiple, Marissa Garza similar to the current level. We extend a BUY recommendation Mining/Chemicals/Industrials/Financials/Railways
[email protected] . The company’s strategy remains focused on strengthening its financial situation, through the sale of non-strategic assets, without neglecting new opportunities that may arise BUY Current Price MXN$24.58 PT2019 MXN$29.50 . In 2019 we anticipate a 3.7% increase in revenue and an 8.1% rise in Dividend 2019 MXN$0.65 EBITDA yoy, supported by improved profitability in all its Dividend (%) 2.7% subsidiaries, highlighting the figures of Alpek, Nemak and Sigma Upside Potential 23.4% Max – Mín LTM 25.54-19.53 2019, key year to strengthen Alfa’s financial situation. The company’s Market Cap (USD$m) 6,534.5 Shares outstanding (m) 5,055.1 strategy is focused on maintaining a long-term value creation approach and Float 54.5% guarantee the excellence of key operations. Accordingly, Alfa will maintain a Daily Turnover (MXN$m) 168.5 Valuation Metrics LTM * conservative profile throughout the year, focusing on enhancing its balance FV/EBITDA Adj 5.8x sheet, through the sale of non-strategic assets, as we have confirmed with P/E 16.0x Axtel’s recent divestment of operations (the sale of Axtel’s residential fiber- to-the-home- business in December) and Alpek (with the recent agreement for Relative performance to MEXBOL the sale of two cogeneration energy plants).