Equity Research

October 8th, 2019 Monthly Andean Strategy Update Reiterating our view on the Andes

In September, the Andean and LatAm regions had a positive performance CAPITAL RESEARCH (+2.6% and +2.5% in USD terms, respectively). Across the Andes, the Chilean market was the top performer (USD: +4.2%; CLP: +5.3%) compared to Peru (USD: +3.0%; PEN: +2.6%) and (USD: -0.6%; COP: +1.2%). Daniel Velandia, CFA +(571) 3394400 ext. 1505 We maintain our Overweight recommendation for , despite a [email protected] strong outperformance in September. • In terms of attribution, nearly ~80% of the outperformance of the index Carolina Ratto was explained by specific shares: i) LATAM (+33%), ii) Enel Am +(562) 2446 1768 (+13%), iii) SQM-B (+13%), iv) (+12%) and v) Copec (+6%). [email protected] • Despite recent positive macro figures (largely influenced by specific and favorable factors), the balance of risks is still fragile and tilted to the Tomás Sanhueza downside, especially amid the external risks. +(562) 2446 1751 • Although September was a positive month and a break from a turbulent [email protected] year, the main forces remain latent. However, we still see that is a question of timing and opportunities in the stock market are present, Sebastián Gallego, CFA with shares at attractive entry points. +(571) 3394400 ext. 1594 • The market is still trading at more than one standard deviation from its [email protected] 3-year average P/E Fwd, reaching 16.0x. • Our top picks continue to be Parque Arauco, Colbun and Engie Chile. Daniel Córdova +(511) 416 3333 Ext. 33052 We maintain our Neutral recommendation for Colombia; local trends [email protected] remain healthy, and we will continue to monitor the global scenario amid higher volatility, particularly in the FX market. ▪ The local index declined 0.6% in USD terms during September, while the MSCI Latam increased 2.5% in the same period. ▪ On the local front, recent macro leading indicators suggest that economic activity remains strong; sales and industrial production reached their highest points of the year in Jul-19. ▪ Forward multiples continue to look attractive, trading below one standard deviation from the average of the last three years. ▪ Our equity strategy continues to be focused on ; recovery in loan growth and lower provision expenses are key themes to our thesis. ▪ Regarding flows, pension funds remain in the top spot of net buying positions YTD. Foreign investors maintain a net selling position. ▪ We reiterate that our Top Picks are and .

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. • The US-China trade stand-off continues, leaving commodity prices with some downside. • Private consumption remains resilient, though it is showing signs of softening in coming months. • Political tensions escalated after President Vizcarra dissolved Congress. • From a medium-term viewpoint, we favor utilities and consumption- IMPORTANT NOTICE (US FINRA RULE 2242) This document is intended for INSTITUTIONAL INVESTORS and is not subject to all of the independence and related stocks to avoid mining companies’ volatility and high beta disclosure standards applicable to debt research reports prepared for retail investors. Credicorp Capital may do or seek to do business with companies sectors. 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. • We maintain InRetail and Ferreycorp as our Top Picks, on solid Investors should consider this report as only a single factor in making their company fundamentals. investment decision. Refer to important disclosures on page 23 1to 26, Analyst Certification on Page 23. Additional disclosures on page 26. Actualizar Contents

Monthly Andean Strategy Update

Chile: Some green shoots during September after weak market performance 5 Top Picks 7 Colombia: We maintain our neutral stance with a positive bias; the biggest risk continues to be the global scenario 8 Top Picks 12 Peru: Political uncertainty now stem from different sources 13 Top Picks 15

Valuation Summary 16

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 Oct-18 Dec-18 Feb-19 Apr-19 Jun-19 Aug-19 Oct-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 16.0x 15.7x 16.0x 20.0% 12.9x 14.0x 10.0% 12.0x 10.0x 0.0% 8.0x 6.0x -10.0% -15% 4.0x -17% -21% -20.0% 2.0x .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 7.9x 0.0% -2.0% 8.0x 6.9x 7.0x 6.5x -4.0% 6.0x -6.0% -8.0% 5.0x -9% -10.0% 4.0x -12.0% 3.0x -15% -14.0% 2.0x -16.0% 1.0x -18% -18.0% .0x -20.0% 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 (+) Reacceleration of economic activity, from 2.5% 2019E GDP growth to 3.1% in The short term of the market will be highly 2020 influenced by external noise and lack of activity from (+) Turning point in earnings growth (2019E: -9%; 2020E: 12%) local and foreign investors. Therefore, we believe (+) Allocation from local investors should gradually move from fixed income to equity the main forces that have driven the weak (-) Limited downside risk considering underperformance against other EM performance are still latent. For now, our top picks (-) Tough 2H19 in terms of macro and corporate earnings are more defensive and will become more bullish (-) Timing for a rebound if uncertain and highly correlated tio US-China trade war once we see more clarity in the external landscape. (-) Strong opposition to government reforms Strategy: We continue to favor a stock picking strategy of companies with solid fundamentals, earnings momentum and/or clear catalysts. Top picks: Engie Chile, Colbun, Parque Arauco 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 (+) Stable rates & inflation performance, corporate governance issues/news, (-) Volatility across foreign markets. special operations for ISA and Éxito,3Q19 results, (-) Twin deficits. regional elections, and potential entrance of (-) Labour market. Ecocementos.

Strategy:

We remain neutral in Colombia. Despite our regional allocation, we maintain a neutral to positive view towards local equities amid: i) strong economic activity, ii) stable inflation and interest rates, iii) strong earnings momentum across the financial sector, and iv) attractive forward multiple valuation when compared to the history.

Top picks: Davivienda and Bancolombia. Peru Allocation: Underweight (+) Private consumption still remains resilient, although it could show signs of Luz del Sur would benefit from tag along rights after softening in coming months. CTG offered USD 3.6bn to Sempra. We take (-) Political tensions reached a boiling point after President Vizcarra dissolved advantage of IFS' recent correction and increase Congress. exposure. Engie backs our defensive stance, with (-) Trade stand-off between US and China continues; there is still downside on upside potential. InRetail also offers an attractive commodity prices on lower global growth. entry level. Nexa could benefit from a recovery in (-) Valuations of non-mining companies remain lower than historical averages zinc prices, with a discount vs. global peers.

Strategy: Trading ideas: We maintain our defensive stance for the short-term in light of the recent political Luz del Sur, IFS, Engie Peru, InRetail and Nexa developments. In this way, we maintained Luz del Sur and Engie in our portfolio and Resources. stay away from issuers that highly depend on non-mining private investment. Top Picks: InRetail and Ferreycorp.

4 Chile Some green shoots during September after weak market performance

We still see In September, the Chilean market posted a positive return in CLP (+5.3%) and USD opportunities in the (+4.2%). After a weak performance in August (-3.4% in CLP), the market had a strong local market; rebound, outperforming developed and emerging markets. However, it is still the however, timing is underperformer of the year (excluding Argentina), which implied that a short-term uncertain. correction was possible. Moreover, it is worth noting that some specific shares drove the outperformance: i) LATAM (+33%), ii) Enel (+12.9%), iii) SQM-B (+12.8%) and iv) Cencosud (+11.9%). With the exception of LATAM, which was driven by the announcement of the partnership with Delta, all other shares mentioned above had been heavily pressured during August and, to a certain extent, during the whole year. Investment flows from foreign investors were the main driver for these shares, but mostly through passive blocks. In fact, when looking at the other shares in the market, the trend in investment flow remains the same. The continuance of the global trade war has sustained an environment of volatility and uncertainty that has caused investors to be reluctant to bet on the Chilean market so far this year. Therefore, despite a good performance of the market during September and a break from a turbulent year, the main forces remain latent. However, we still believe that it is a question of timing and that opportunities in the stock market exist with shares at attractive entry points.

The INE released economic sectorial figures for Aug-19, which showed some upward surprises, particularly in mining (+5.3% y/y), which benefited not only from a favorable statistical base but also from the reversion of temporary factors that affected the sector in 1H19. Conversely, manufacturing production decreased by -1.5% y/y, showing a still weak performance. Regarding the labor market, even though its lagging status has diminished somewhat in the last couple of periods, we believe it is still far from being a significant driver of consumption as private payrolls are not growing. The BCCh announced that the Aug-19 Imacec grew 3.7% y/y, well above expectations (+2.6% y/y consensus) and our own forecast (+2.5% y/y). This was in line with the positive mining figures and solid growth for the non-mining component (+3.5% y/y), which was positively influenced by services and construction activities, according to the BCCh’s statement. Balance of risks in macro is still fragile We still expect a rebound in 3Q19 that is consistent with our 2019 GDP growth and tilted to the estimate of 2.5%. Nevertheless, we highlight that, despite these recent positive figures downside. (largely influenced by specific factors and a favorable statistical base comparison), the balance of risks is still fragile and tilted to the downside, especially amid the external risks. Thus, considering the BCCh’s explicit dovish bias in the Sep-19 Quarterly Report and Minutes, we think that the likelihood of a new rate cut of 25 bps as soon as in Oct-19 is still high, which is already priced in by the market. The figures for inflation and retail sales, which will be released before the Oct-19 policy meeting, will significantly influence the BCCh’s stance.

Business confidence is not recovering. The IMCE was 50.7 in Sep-19, down from 51.02 in Aug-19, decreasing after two consecutive increases but showing that business expectations are still at an optimistic level, slightly above the neutral point (i.e. 50). We highlight that the non-mining component remained at a pessimistic level, declining to 47.2 in Sep-19 from 47.7 in Aug-19. The largest drop was in construction (from 47.6 to 42.7), while the commerce, mining and industry components showed marginal advances (to 51.6, 66.1 and 46.4, respectively).

5 Chile Strategy

Weak earnings performance during 2Q19, driven by one-offs in specific companies. According to our estimates, excluding one-offs and changes in accounting in order to make a comparative analysis, the companies composing the IPSA index posted a weak 6.5% y/y drop in EBITDA, while earnings showed a mild 2.1% y/y increase. However, when including earnings one-offs, which include the CLP 153bn gain for CCU due to the Budweiser license payment in Argentina and Enel Chile’s USD 282mn loss in 2Q19 due to coal phase-out (Tarapaca and Bocamina plants), earnings dropped 22% y/y. In terms of sectors, it is worth noting that banks had a resilient performance after a weak 1Q19, posting 8.4% y/y earnings growth. However, retail sector earnings continued to be weak with similar dynamics as those seen in recent quarters, posting a strong 22% y/y drop. Except for Enel Chile and Enel Americas, which posted earnings growth, the utilities sector had a negative performance (-18% y/y). Thus, the main sectors have continued to show the same dynamics, without any turning point. Although we expect 2H19 to be more positive due to a more favorable comparative base, we maintain our forecast of a 9% y/y drop in earnings in 2019. In our view, the major turnaround will come in 2020.

Our overweight rating in Chile is based on: i) Expected acceleration in growth. We expect GDP growth to ramp up from 2.5% in 2019 to 3.1% in 2020, driven by investment (+5.0% y/y) coupled with a better scenario for domestic demand. Moreover, we forecast that corporate earnings will improve from a 9% y/y estimated drop in 2019 to 12% y/y growth in 2020, boosted by a recovery in sectors such as utilities (+16% y/y) and banks (+12% y/y). As we do not assume a re-rating of the Chilean multiple, our forecast depends on a turning point in EPS. ii) Expected flows. Flows have become crucial. We believe local institutional investors will start to change the allocation in their portfolios, favoring local equities over fixed income in a search for yield, given the depressed interest rates in the local bond market. iii) Limited downside risk. Although our thesis depends on an end to the global turmoil, we believe that downside risks for the Chilean market are limited and that potential value gains in many shares look appealing for 2020.

Our Chilean equity sample is trading at 15.3x P/E 12m Fwd and 7.9x EV/EBITDA 12m Fwd. These valuations imply a discount from the market’s five-year average of close to 1 S.D. for both Fwd P/E and Fwd EV/EBITDA. It is worth noting that we are incorporating soft earnings growth in 2H19 and an upturn in 2020. Our bottom-up calculation for the 2020 IPSA index target assumes a ~20% upside for the market, which implies a re-rating of the multiple. However, this is not our base case scenario given the global and domestic risks. Still, downside risk is limited.

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

24 11

22 10 20

18 9 16.0x

16 7.9x 8 14

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

6 Top Picks Chile

Our Top Picks We maintain our selective strategy in the Chilean stock market. Engie Chile, Colbun are Engie Chile, and Parque Arauco are our Top Picks. Colbun and Parque Arauco. Engie Chile (BUY; T.P.: CLP 1,450). Engie Chile is our preferred play in the Latin American Utilities space (excluding ) on the back of the extended duration of its PPA portfolio, its low leverage and its management/parent quality. Regarding the first factor, we believe that Engie Chile shares’ performance will negatively correlate with short-term power prices in Chile as the value of its contracts should rise with lower spot prices. Regarding debt, the substantial room for leverage allows Engie Chile to face the coal phase-out process in Chile comfortably. Finally, we highlight that, as the company completed the construction of its 375M IEM unit in June, we expect the second half results to surprise the market to the upside and support our forecast of a solid 8.4% yield for 2020.

Colbun (BUY; T.P.: CLP 160). Colbun shares have been exceedingly punished due to the concern about long-term power prices in Chile, in our view. The current 5.5x 2019 EV/EBITDA fails to properly factor in the value of its current PPA portfolio and the quality of its hydro base. Additionally, we highlight that Colbun has shown strict capital discipline following its acquisition in Peru and has passed on many deals available in the Andean region, preferring to distribute extraordinary dividends in the face of compressed of IRRs for M&A operations in the power space. We expect solid dividend distributions to continue during the next two years, at least, on the back of the company’s substantial FCF generation. Overall, we project a 9.1% yield for 2020.

Parque Arauco (BUY; T.P.: CLP 2,415). We are including Parque Arauco in our Top Picks, reflecting our positive view on the real estate sector. The pricing of the most recent M&A transactions in Chile demonstrates the attractiveness of this asset class amid low yields in the local corporate bond market. For Parque Arauco, we expect additional GLA expansion of ~144,000 sqm (incorporating the hotel in Kennedy) over the next four years. This should boost Adj NOI with a 2018-2024 CAGR growth of ~9%. We are confident in management’s ability to execute in the upcoming years, considering that, over the LTM, the company has been able to buy assets at a ~7% cap rate and sell assets at a ~5% cap rate.

Chile - Top Picks

Last Target Total Mkt. P/E FV/EBITDA P/BV Div Yield Price Price Upside Return (USD mn) 2019E 2020E 2019E 2020E LTM 2020E Sectors Engie Chile 1,269 1,450 14.3% 22.3% 1,840 12.5 9.1 5.8 5.4 0.9 8.1% Utilities Colbun 130 160 23.0% 31.8% 3,142 11.4 11.4 6.2 6.5 0.9 8.8% Utilities Parque Arauco 2,050 2,415 17.8% 21.4% 2,547 18.1 17.7 17.8 16.8 1.9 3.6% Real Estate Chilean Picks a 18.4% 25.2% 7,529 14.0 12.7 9.9 9.6 1.2 6.8% IPSA 5,022 5,740 14.3% 18.1% 147,121 17.4 15.3 8.7 8.0 1.6 3.8%

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

7 Colombia We maintain our neutral stance with a positive bias; the biggest risk continues to be the global scenario

Market Color

During September, the COLCAP index underperformed the MSCI Latam index. The local index declined 0.6% in USD terms (+1.18% in local currency), compared to a 2.5% increase from the MSCI Latam index (USD terms). Despite recent performance, the COLCAP index continues to outperform the MSCI Latam index on a YTD basis (~+10.4% vs +3.1% in USD terms). Going forward, global volatility remains a source of concern considering the trade tensions between USA and China and a strong USD relative to emerging market currencies.

From a bottom-up perspective, Holdings, Banco de Bogota and were among the top performers in Sep-19. The share price performance of Avianca was mainly driven by: i) the ongoing negotiations between Avianca and bondholders, which have been extended until October 10th, 2019, ii) Kingsland’s commitment to support Avianca with USD 50 mn and its willingness to provide additional funding of up to USD 250 mn (in alliance with United) and iii) a favorable ruling for Kingsland in the New York court after the former top shareholder of Avianca introduced a lawsuit related to recent changes in the ownership of the company. Regarding Banco de Bogota, we highlight that positive trends across the banking sector along with an attractive valuation have supported share price performance. Finally, regarding Ecopetrol, the upward pressure on oil prices during part of Sep-19 (due to the violent attacks in Saudi Arabia), a potential scenario in which Ecopetrol can start developing non-conventional pilots in 2020 and an attractive entry point below COP 3,000/share explained the company’s share price performance. On the negative side, preferred shares of Grupo Sura and common shares of declined roughly 5.0% during the month; a lack of fundamental catalysts is a recurring theme for these two companies.

Key announcements regarding the development of non-conventionals (fracking) in Colombia was the biggest news of the month on the local front. The State Council announced its decision to remain on hold and suspend any activity associated with fracking in Colombia. Ecopetrol is currently in an investigation phase to collect evidence to prove that the company can comply with all regulatory and environmental requirements. The legislative branch should provide a new ruling during 2020, and Ecopetrol continues to believe that pilots for fracking may start to be developed during 2H20. Finally, we reiterate that Ecopetrol remains committed to the goal of increasing O&G reserves; in fact, the recent JV announcement with OXY is right in line with that strategic goal as the company may gain expertise in non-conventional development.

A recomposition of the COLCAP index will take place at the end of the month. We highlight the expected entrance of Mineros and Promigas, and we expect ETB, Conconcreto and PfCemargos to exit the index. Furthermore, we are waiting for the official tender offer document of Exito as it is currently unclear (we see several possible scenarios) whether the company’s shares will remain in the COLCAP index. At this point, without any formal announcement by the BVC, we believe that Exito will remain in the COLCAP index, considering its selection function. Finally, we forecast an outflow of close to ~USD 15 mn for shares of Bancolombia (considering both common and preferred shares).

8 Regarding market players and flows, local pension funds remain pretty much alone in maintaining a net buying position. Meanwhile, ETF flows to equities in Colombia maintained a positive trend over the last month. In Aug-19, local pension funds registered a net buying position of USD 81.4 mn, keeping them in the top spot on a YTD basis with USD 541.9 mn. On the other hand, foreign investors continued to show a more negative stance towards the local market. In fact, they were net sellers (USD 59.5 mn) in Aug-19 and have accumulated net sales of USD 173.4 mn on a YTD basis. Regarding flows, we highlight that Colombia continues to be second in LatAm with ETF flows devoted to equities of around USD 485 mn (as of September 27th, 2019), compared to USD 462 mn from a month ago. Brazil remains in the top spot of inflows, while Argentina and Mexico are at the bottom of the list.

The high beta status of the COP has been confirmed recently, reaching new record lows vs the USD. The beta of the COP is one of the highest among EM, only behind the ZAR, ARS and TRY. Although Colombia is far from having the structural problems of these countries, the truth is that the level of twin deficits remains uncomfortably high (~7% of GDP). This is significant under the current scenario of strong slowdown in the global economy amid trade tensions and considering that Colombia remains vulnerable to swings in oil prices. Accordingly, it seems that, at current levels, the final outcome in the upcoming months/quarters for the COP is binomial, implying that either i) there will be strong appreciation, converging to the levels suggested by models assuming more normal conditions in markets and the global economy (~COP 3,000-3,200) or ii) the FX will continue to reach new highs, acting as the adjustment variable for the current imbalances, if the global economy continues to deteriorate.

Macro / political developments

Macro data continues to show strength across the local economic activity. In Jul-19, retail sales and industrial production grew at their strongest paces of the year (+8.5% y/y and +3.5% y/y, respectively). Regarding retail sales, we highlight that the series excluding vehicles increased by 8.0% y/y, its strongest pace since Sep-15. The positive performance of private consumption throughout the year has been the result of lower inflation compared to previous years, higher real salaries (recall that, this year, the government increased the minimum wage by the highest rate in the last 40 years in real terms), low interest rates and a positive effect on consumption coming from the migratory flow of Venezuelans. Given the recent data, along with our ongoing discussions with clients in Colombia, we remain confident that GDP growth will be 3.3% by year end (outperforming the region by a wide margin).

Inflation took a breather in Aug-19, which is positive news after several months of acceleration. The CPI rose just 0.09% m/m in Aug-19, below our 0.15% estimate and the market consensus forecast of 0.16% (Bloomberg survey). Thus, the annual figure decelerated by 3 bps to 3.76% y/y after five consecutive increases, decreasing from the 19-month high of 3.79% inflation. We expect year-end inflation to stand at 3.7% and convergence towards a level of 3.2% to occur during 2020. Finally, we reiterate that the outlook for the monetary policy stance of the BanRep has not changed much. Overall, annual inflation near the upper limit of the target range, a volatile COP (currently at record low levels) and a wide CAD (north of 4% of GDP) limit the BanRep’s ability to follow the worldwide trend of policy easing. On the other hand, preventive rate hikes also seem unlikely as inflation probably peaked in Jul-19 and medium- and long-term inflation expectations have decreased on a YTD basis.

The biggest news on the political front is related to the upcoming regional elections. According to the latest poll (Guarumo & EconoAnalítica), Claudia Lopez and

9 Carlos Fernando Galan are tied (at the top spot with roughly 25.8% and 25.7% vote intention). Meanwhile, Miguel Uribe appears to be in the third spot with 20.6% of vote intention. Beyond these candidates, we assign a low probability for other candidates to win the election. However, we continue to monitor candidate Hollman Morris which we may argue that should be the candidate with less market friendly policies among the four candidates previously mentioned. Considering the latest poll, Mr Morris has 13.6% vote intention. We reiterate that regional elections, including Bogota will take place on October 27th – 2019.

Equity strategy

We are reiterating our year-end 2020E target of 1,710 for the COLCAP index after we recently published our Andean Investor Guide (see full report). Despite the neutral stance in our regional allocation, we maintain a neutral to positive view towards local equities in Colombia. We see key drivers such as: i) healthy economic activity, as we continue to expect GDP growth to remain above 3.0% for both 2019 and 2020 (recall that the Colombian economy has not grown above the 3.0% threshold since 2014, ii) an attractive entry point for the COP, as our models suggest equilibrium levels below 3,200, assuming that the global economy does not deteriorate further, iii) positive earnings momentum across banks (roughly 30% of the COLCAP index), and iv) specific corporate events, such as potential transactions at Exito and ISA. Finally, we reiterate that equity valuations in Colombia remain attractive. Our sample of the COLCAP index currently trades at 15.7 x P/E forward and 6.9x EV/EBITDA forward, compared to a 3-year average of 19.8x and 8.4x, respectively. In fact, we highlight that the Colombian market currently trades below one standard deviation on a forward multiple basis.

Our equity strategy in Colombia continues to rely primarily on the banking sector. Although we like other stories and we have a BUY rating on names such as BVC, Exito and Nutresa, we believe that Bancolombia and Davivienda have a compelling enough story for us to include them in our top picks section. At this point, we expect i) an upward trend for loan growth at an industry level of 8.2% y/y and 9.3% y/y for 2019 and 2020, respectively (this contrasts with levels close to 6.0% y/y for both 2017 and 2018), ii) an at least ~20 bps y/y decline in the cost of risk in 2020 across key banks as we consider 100% coverage for both Electricaribe and RDS 2 by year-end 2019. In addition, we see an improving trend in asset quality, particularly within the consumer segment, iii) top banks in Colombia currently have a Tier 1 ratio of above 8.0% compared to a minimum legal requirement of 4.5%; more importantly, potential changes coming from Basel III may be beneficial to local banks, and iv) expansions of ROAE in 2020E compared to prior years. Under this scenario, we continue to believe that this is an ideal combo for banks when considering valuations that remain below 1.5x 2020E P/BV. Finally, we reiterate our preference for Bancolombia and Davivienda as our top choices for the sector and as our top picks for the companies under our coverage in Colombia. Despite the strong performance from Aval and our positive view on the name, we prefer Bancolombia and Davivienda as our top picks. With regards to Aval, we believe that potential challenges ahead and media noise coming from the RDS 2 case support our view.

Preliminary results for the banking sector during July- 2019 confirm our thesis and a positive view for banks. Net income for the industry in Jul-19 reached COP 874.7 bn; despite a slight slowdown relative to the prior month, we highlight that net earnings advanced 33.4% y/y. Profitability, measured in terms of quarterly ROAE, was 12.8% compared to 10.8% during the same period of 2018. Healthy results continued to be mainly driven by: i) higher loan growth, ii) strong fee income generation, and iii) a reduction in cost of risk.

10 Although we like other names such as BVC, Exito and Nutresa, these names are not currently included in our Top Picks due to i) lack of liquidity at BVC, ii) corporate governance issues at Exito and iii) lack of short-term catalysts at Nutresa

Regarding the cement and construction industry, we expect to continue seeing mild volume growth. Cement dispatches are currently displaying 3.7% LTM growth, while prices have increased 5.3% y/y. We expect cement dispatches to continue growing at a similar pace, with our estimate at 3%-5% for year-end 2019. However, we highlight that price increases should be limited due to the entrance of Ecocementos during 4Q19. In addition, fuel prices will be key, after negative surprises in EBITDA margins in 2Q19 due to fuel prices. We reiterate our thesis of a mild recovery in the cement and construction industry. However, we also expect a more conservative approach at company levels due to the entrance of Ecocementos and possible pressures from energy prices.

On the utilities side, the renewable energy auction will be the center of attention this month, and regulators expect to receive guaranteed contracts in order to ensure the development of these projects. The entrance of these projects is expected in Jan-22, with 15-year contracts for the PPAs (previously contracts were around 12 years long). On October 2nd, 2019, the UPME revealed the 23 off-takers in the auction process, which include Celsia, Ecopetrol, Codensa (GEB) and EPM (three less than the official announcement on September 7th, 2019). These players must now present their guaranties (“Garantía de Seriedad”) before the auction deadline. The auction ends on October 22nd, 2019. We expect three main outcomes: i) maximum prices in terms of PPAs for these projects, ii) target demand and iii) proper allocation of the resources. We believe the outcome could be similar to the renewable energy auction in Chile (after 2015) that led to lower prices and excess capacity, which justifies our cautious view on the sector.

On the O&G side, the National Hydrocarbon Agency (ANH) will reveal the target players for the 59 new leads in E&P by the end of the month. Of these leads, 27 of them were proposed by players in the sector and the remaining 32 by ANH. It is worth noting that nine of these projects come from other bids conducted earlier this year. Meanwhile, 13 of the 59 leads have clearance to be gas reserves, according to ANH. We expect the initial proposals to be submitted before year end, with counter-offers coming afterwards. We see these leads as a positive signal, regardless of the outcome of the non-conventional approvals. Recall that this is an issue we expect to be resolved next year with the initiation of the Pilot Programs (PPII).

Considering all of the above, we reiterate that our Top Picks are Davivienda and Bancolombia. P/E Forward (12-month rolling) EV/EBITDA Forward (12-month rolling)

28 11 26 24 10 22 20 9 18 8 16 14 15.7x 7 12 6.9x 10 6 Oct-16 Oct-17 Oct-18 Oct-19 Oct-16 Oct-17 Oct-18 Oct-19 Source: Company Reports, Credicorp Capital, & Bloomberg

11 Top Picks Colombia

Top Picks Colombia

Davivienda (BUY; T.P.: COP 47,500). We are maintaining Davivienda as one of our Top Picks as we continue to like the ’s medium-term story. Our view is mainly based on i) expected higher loan growth in Colombia compared to the industry average for both 2019E and 2020E (at least 150 bps higher and ~11.0% in 2020), ii) an estimated 15-bps decline in cost of risk next year (recall that both Electricaribe and RDS 2 should be off the table in 2020), iii) a robust digital transformation plan (as of 2Q19, Davivienda’s product sales through digital channels accounted for 40% of total sales, compared to 4.0% one year ago), iv) 23.1% y/y EPS growth for 2020E, v) a 100-bps ROAE expansion for 2020E compared to 2019E and vi) a still attractive valuation of roughly 1.4x P/BV 2020E. Finally, we highlight that Davivienda has not faced any corporate governance issues, which we believe has been a key driver for the stock, in contrast to other companies in our Colombian sample.

Bancolombia (BUY; T.P.: COP 48,800). In addition to similar trends in provision expenses as Davivienda, we believe that Bancolombia should also benefit from i) strong annual growth in the consumer segment in Colombia (over 20% y/y for 2019E and double digits for 2020E), ii) digital penetration through key apps/platforms, such as Nequi and Ahorro a la Mano and iii) improvement of efficiency ratios, as we see a cost to income ratio of 48.7% for 2020E, compared to 50.1% in 2018. Finally, we reiterate that we expect an 80-bps ROAE expansion to 13.2% next year (compared to 2019E) Under this scenario, considering the improving macro picture in Colombia, we believe that Bancolombia continues to be an ideal vehicle to invest in the local market.

Colombia - Top Picks Last Target Total Mkt. P/E FV/EBITDA P/BV Div Yield Price Price Upside Return (USD mn) 2019E 2020E 2019E 2020E LTM 2020E Sector Davivienda 41,860 47,500 13.5% 15.8% 5,405 12.9 10.5 nm nm 1.6 2.3% Banks Bancolombia 43,000 48,800 13.5% 16.3% 11,313 12.9 11.2 nm nm 1.6 2.8% Banks Colombian Picks a 13.5% 16.1% 16,718 12.9 10.8 nm nm 1.6 2.6% COLCAP 1,575 1,710 8.6% 15.0% 81,758 11.9 14.6 7.8 7.9 1.3 6.4% Sources: Bloomberg, Company Reports and Credicorp Capital a Simple average, excluding Market Capitalization

12 Peru Political uncertainty now stems from different sources

President Vizcarra dissolved Congress after interpreting that his request for a vote Congress was of confidence on new rules to nominate magistrates to the Constitutional Court had dissolved by been denied when Congress chose to proceed with the election of new magistrates for President Vizcarra this court instead of starting debate and then voting on said request of confidence (which after interpreting that would have changed the way in which nominees to the Constitutional Court are selected). confidence had been According to the constitution, the President is entitled to dissolve Congress if the latter denied. denies for a second time its confidence to the administration elected in the general elections. The first such event occurred in Sep-17 when Congress denied its confidence to then President Kuczynski’s cabinet of ministers.

President Vizcarra’s decision to shut down Congress and call for congressional elections closes a chapter of high political instability in Peru but opens a new one in which political noise will depend on legal challenges arising from his decision Congressional and expectations on which political parties will be more successful in the upcoming elections are congressional elections (on January 26th, 2020). In the short term, we do not rule out scheduled to take further market volatility, particularly if the now dissolved Congress refuses to disband, place on January foreign governments or multilateral institutions react negatively towards Vizcarra’s 26th, 2020. administration or the new cabinet of ministers lacks political expertise. However, VP Araoz resigned from the Vizcarra administration, which may lower noise as the perception of “two simultaneous presidents” in Peru is no longer valid. Regarding the economy, we believe it is still too early to assess the impact on activity in the upcoming months, though non-mining private investment could take a more cautious stance until a clearer picture emerges on what the next Congress will look like. We had already incorporated high political risk into our valuation models, and thus these recent events support our Underweight recommendation for Peruvian equities.

Congress has already denounced Vizcarra’s decision as unconstitutional, arguing it is based on an arbitrary interpretation of facts. The President of Congress, Pedro Olaechea, argued that a granting or denial of confidence can only be the result of a vote in a plenary session of Congress and that the constitution does not envisage the possibility Former members of that the President can interpret that either event -granting or denial- has occurred without Congress are taking an explicit vote. Accordingly, in response to Vizcarra’s decision, Congress voted to action to present the suspend him for 12 months -accusing Vizcarra of committing a constitutional infraction- case of dissolution and VP Araoz was sworn in as interim President (however, she has already resigned from to the Constitutional this position). According to many political analysts, these actions by Congress are not Court in order to valid since it had already been dissolved. Moreover, military and police forces have obtain a ruling on the affirmed their loyalty to Vizcarra, and popular support for Congress’ dissolution remains constitutionality of strong, underpinning the President’s still relatively high popularity (~48% according to the the dissolution. latest Ipsos survey). However, former members of Congress may push for legal challenges to the way in which Vizcarra shut down Congress, which will have to be addressed by the Constitutional Court.

Although of a different kind, political noise will persist in the short term. We believe political noise will continue in the upcoming months, stemming from i) how legal challenges to Vizcarra’s dissolution of Congress evolve, ii) the behavior of the now dissolved Congress and iii) expectations on what the composition of political forces in the Sources of political Congress to be elected in Jan-20 will be. At this moment, it is difficult to predict how these uncertainty have factors will evolve in the upcoming weeks, and thus PEN-denominated financial assets changed. may be subject to an extra dose of volatility.

13 Peru Strategy

In September plus the first three days of October, the Lima retreated 0,35% in USD and 0,52% PEN, underperforming the MSCI Latam as political tensions escalated with the dissolution of Congress and the trade war between the US and China and concerns about lower global growth hit base metal prices. Metal prices registered decreases, as copper (-1.5%), zinc (-6.0%) and tin (-8.1%) all declined. At the end of September, President Vizcarra dissolved Congress, and the more internationally exposed stocks were hit, while the others did not register significant changes.

We maintain our Underweight recommendation for Peru as political tensions have We maintain our escalated due to the dissolution of Congress and uncertainty about the Underweight government´s agenda. For at least the next four months, the executive branch will recommendation for govern through urgency decrees. There is still uncertainty about what agenda the Peru, as both administration will prioritize and the composition of the new cabinet. external and domestic risks will The political turmoil has not impacted all stocks, only those with a high exposure to continue weighing on foreign investors. We believe the valuations of most of the stocks in the BVL index have local equities. not been materially affected by the political tensions; however, Credicorp and Southern Copper and, to a somewhat lesser extent, IFS, Ferreycorp and Alicorp, which have the highest exposure to foreign investors, have suffered. However, the impacted stocks represent a significant weight in the BVL index. We do not see valuations in cement and construction, utilities or mining that are materially lower than the previous month. With no clear catalysts on the horizon, we maintain our Underweight recommendation for Peru.

Local stocks are trading at lower discounts than before as Luz del Sur somewhat boosted valuations. At 12.5x 12M forward P/E, companies under our coverage are We highlight our trading at a ~24% discount against the two-year historical average (corrected for the preference for significant losses in Buenaventura). Likewise, at 6.5x, the 12M forward EV/EBITDA is at a specific names in 13.0% discount vs the five-year historical average. Luz del Sur’s rally has somewhat consumption and boosted the multiple as it has the fifth highest market cap in our sample and the stock has utilities stocks. yielded 49% since the release of our Andean Investor Guide. On an ex-mining companies basis, the EV/EBITDA is trading at a premium of 5% and the P/E multiple at a premium of ~4% compared to their historical averages. Mining companies’ trading discounts have dropped further below their historical averages, affected by depressed metal prices. On the other hand, stocks linked to domestic demand are trading close to or above to their historical averages for EV/EBITDA and P/E multiples. The trading discount on Cerro Verde, which has the highest market cap in our sample, has increased. P/E Forward (12-month rolling) * FV/EBITDA Forward (12-month rolling) *

26 12

24 11

22 10

20 9

18 8

16 7

14 12.9x 6 6.5x 12 5 Oct-14 Oct-15 Oct-16 Oct-17 Oct-18 Oct-19 Oct-14 Oct-15 Oct-16 Oct-17 Oct-18 Oct-19 Source: Company Reports, Credicorp Capital, & Bloomberg *Mean in the chart considers the last 2 years.

14 Top Picks Peru

InRetail (BUY; T.P.: USD 46.70). 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 2.85). We maintain Ferreycorp as a Top Pick as it is positioned to be one of the top performers in this mining investment upcycle. In 2019 and 2020, it will provide CAT machinery to Mina Justa for USD 100mn. Additionally, it will also deliver a fleet of CAT trucks of 320 MT and other types of equipment for the Quellaveco Ferreycorp should mining project, in addition to providing specialized support to the project. The total value of benefit from the the contract is USD 500mn, and the biggest cash inflow will take place in 2021 as major mining investment machinery deliveries are scheduled to take place. In addition, we expect the Spare Parts upcycle. & Services to continue to grow, albeit at a more moderate rate, providing more stability to the company’s overall revenues. It is worth noting that the big mining machinery deliveries to come should foster future SP&S growth. These positive factors should keep driving results forward for the next couple of years, and we believe this impact has not been priced in yet, given the current price levels of the company’s stock. .

Peru - Top Picks

Last Target Total Mkt. P/E FV/EBITDA P/BV Div Yield Price Price Upside Return (USD mn) 2019E 2020E 2019E 2020E LTM 2020E Sectors InRetail 35.00 46.72 33.5% 34.0% 3,598 23.3 18.2 9.8 8.7 2.8 0.5% Retail Ferreycorp 2.04 2.85 39.7% 46.6% 587 7.3 7.7 5.6 5.7 0.9 6.9% Materials Peruvian Picks a 36.6% 40.3% 4,185 15.3 13.0 7.7 7.2 1.9 3.7% S&P/BVL 19,008 22,910 20.5% 23.6% 35,630 22.0 15.0 8.0 6.9 nm 3.1% Sources: Bloomberg, Company Reports and Credicorp Capital a Simple average, excluding Market Capitalization

15 Valuation Summary

October 2019

16 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 2020E 2019E 2020E 2019E 2020E AESGener Utilities 157 190 HOLD 1,814 1.5 7.0 7.6 6.1 6.0 0.7 14.3% 10.0% 9.2% 3.2% 2.9% Aguas-A Utilities 393 390 UPERF 3,211 3.2 17.7 16.8 10.5 10.0 3.8 6.2% 22.3% 22.9% 7.4% 7.5% Andina-B Food & Beverages 2,370 2,760 BUY 2,913 4.3 0.3 18.3 18.1 8.7 8.4 2.7 4.5% 14.1% 13.8% 5.5% 5.4% Antarchile Conglomerates 7,600 9,400 HOLD 4,776 0.5 14.2 14.6 7.8 7.3 0.7 3.5% 5.0% 4.7% 1.4% 1.3% Banco de Chile Banks 102 114 HOLD 14,189 10.9 2.0 16.4 14.8 nm nm 3.0 3.1% 18.3% 18.8% 1.7% 1.7% Banco Santander Banks 50.6 58.0 BUY 13,131 7.4 8.2 16.0 14.2 nm nm 2.9 3.7% 17.7% 18.4% 1.4% 1.4% BCI Banks 45,501 48,100 HOLD 8,873 3.6 14.1 12.6 nm nm 1.7 2.5% 12.5% 13.3% 1.0% 1.1% Besalco Cement & Construction 577 650 BUY 458 0.3 23.6 18.9 11.2 8.9 1.8 2.9% 7.5% 9.0% 2.0% 2.4% CAP Mining 6,270 7,500 HOLD 1,290 3.5 10.6 7.5 6.2 5.1 0.6 4.7% 6.0% 8.5% 2.3% 3.1% CCU Food & Beverages 8,010 8,840 UPERF 4,076 3.4 5.8 20.6 18.8 9.5 9.3 2.8 2.9% 11.4% 12.4% 6.0% 6.4% Cencosud Retail 1,188 1,400 BUY 4,684 7.4 9.5 11.9 9.1 10.2 nm 4.2% 8.9% 7.6% 3.4% 2.7% CMPC Pulp & Paper 1,660 2,100 BUY 5,714 6.3 125.9 88.3 8.7 8.5 0.7 0.7% 0.6% 0.8% 0.3% 0.4% Colbun Utilities 130 160 BUY 3,142 2.3 11.4 11.4 6.2 6.5 0.9 8.8% 7.7% 7.7% 4.1% 4.2% Food & Beverages 1,450 1,620 HOLD 1,492 1.2 21.7 18.9 14.1 12.3 1.9 2.8% 8.6% 9.4% 4.3% 4.7% Copec Pulp & Paper 6,651 8,000 BUY 11,905 6.7 21.7 21.5 9.2 8.6 1.1 2.3% 5.1% 5.0% 2.3% 2.3% Embonor-B Food & Beverages 1,455 1,810 BUY 992 0.6 16.0 15.2 8.1 7.6 2.2 5.0% 12.2% 12.4% 5.8% 5.7% Enel Americas Utilities 136 120 HOLD 14,121 15.6 11.3 11.1 9.0 5.9 5.5 2.6 4.5% 15.0% 14.6% 4.6% 5.4% Enel Chile Utilities 63.4 74.0 HOLD 6,035 4.9 1.6 14.3 9.3 6.1 5.7 1.2 4.9% 10.5% 12.6% 4.8% 5.9% Enel Generacion Chile Utilities 400 400 UPERF 4,516 0.5 13.7 8.8 6.2 5.8 7.7 8.2% 11.5% 17.6% 6.1% 9.4% Engie Chile Utilities 1,269 1,450 BUY 1,840 2.0 12.5 9.1 5.8 5.4 0.9 8.1% 7.0% 9.4% 4.3% 5.8% Enjoy Entertainment 35 45 HOLD 224 0.1 -8.1 11.6 8.2 6.7 1.0 0.0% -13.3% 9.5% -3.2% 2.2% Telecom & IT 6,300.0 7,450.0 BUY 2,620 2.2 47.3 30.9 7.4 6.8 1.5 0.8% 2.9% 4.3% 1.0% 1.5% Falabella Retail 4,099 4,780 HOLD 14,161 16.4 26.7 23.4 13.0 12.1 2.3 1.5% 7.6% 8.3% 2.4% 2.6% Forus Retail 1,508 1,710 BUY 537 0.4 12.3 17.4 6.9 6.8 1.7 3.3% 13.8% 9.1% 11.0% 6.8% Hites Retail 405 530 HOLD 210 0.2 17.1 14.4 8.2 7.6 1.2 2.6% 6.6% 7.9% 2.2% 2.2% ILC Conglomerates 11,085 14,600 BUY 1,526 1.1 10.3 9.3 nm nm 1.7 4.5% nm nm nm nm Itau Corpbanca Banks 5 6 HOLD 3,874 2.2 0.1 15.1 14.0 nm nm 0.8 2.0% 5.5% 5.7% 0.6% 0.6% Latam Transport 7,971 7,110 HOLD 6,656 5.8 228.3 39.4 7.5 6.6 2.2 0.3% 0.9% 5.3% 0.1% 0.8% Materials 38 38 UPERF 408 0.2 39.2 18.3 13.4 13.5 0.5 2.3% 1.3% 2.8% 0.8% 1.9% Parque Arauco Real Estate 2,050 2,415 BUY 2,547 2.0 18.1 17.7 17.8 16.8 1.9 3.6% 10.4% 9.9% 4.1% 3.9% Quiñenco Conglomerates 1,795 2,170 HOLD 4,109 1.0 10.6 10.3 nm nm 0.9 4.7% nm nm nm nm Ripley Retail 517 613 BUY 1,379 1.1 9.9 19.0 11.3 11.0 1.1 3.5% 9.8% 5.0% 3.1% 1.5% Salfacorp Cement & Construction 724 900 BUY 449 0.6 13.1 11.5 18.5 16.7 0.9 2.3% 6.5% 7.0% 2.3% 2.6% Security Banks 250 271 HOLD 1,272 0.8 11.1 11.0 nm nm 1.2 5.2% 11.2% 10.8% 0.8% 0.7% SK Industrial 1,138 1,400 HOLD 1,685 0.3 13.9 12.6 8.4 7.7 1.3 5.3% 8.6% 8.8% 3.1% 3.2% SM SAAM Transport 63 70 HOLD 848 0.3 15.9 14.1 6.5 5.9 1.1 3.8% 6.8% 7.5% 3.6% 3.8% SMU Retail 171 213 HOLD 1,362 0.8 29.9 24.7 9.4 9.1 1.4 1.0% 4.6% 5.4% 1.7% 2.0% Sonda Telecom & IT 888 1,080 HOLD 1,066 1.3 28.7 21.5 9.8 8.2 1.6 1.9% 5.3% 6.8% 2.8% 3.5% SQM-B Materials 19,805 22,200 BUY 7,198 13.3 28.0 23.6 17.2 11.5 9.3 3.4 4.0% 15.0% 20.6% 7.2% 9.7% Chile Sample 5,022 5,740 147,121 132.9 17.4 15.3 8.7 8.0 1.6 3.8% 9.1% 10.1% 1.9% 2.0% Source: Company Reports, Credicorp Capital, & Bloomberg

17 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 2020E 2019E 2020E 2019E 2020E Aceros Arequipa Cement & Construction 0.65 0.90 BUY 316 0.0 6.8 6.3 4.2 3.5 0.5 8.4% 7.8% 8.1% 3.9% 4.0% Alicorp Food & Beverages 9.05 12.10 BUY 2,274 0.9 16.9 12.9 10.6 9.1 2.5 3.0% 13.6% 16.3% 4.6% 5.4% Buenaventura Mining 14.51 17.80 HOLD 3,737 21.0 38.8 19.9 15.7 9.8 1.3 0.2% 3.4% 6.3% 2.3% 4.2% Cementos Pacasmayo Cement & Construction 5.79 7.20 HOLD 728 0.2 0.1 18.6 16.4 9.0 8.3 1.5 6.5% 9.1% 10.4% 4.6% 5.2% Cerro Verde Mining 18.00 24.00 BUY 6,301 0.1 13.8 11.6 4.7 4.3 1.2 3.4% 8.7% 9.8% 6.0% 7.0% Enel Distribucion Peru Utilities 6.48 7.20 HOLD 1,220 0.1 9.6 10.4 7.1 6.7 nm 4.2% 18.7% 15.2% 9.2% 7.8% Enel Generacion Peru Utilities 2.46 2.88 HOLD 2,059 0.0 10.2 10.2 5.8 5.8 nm 4.8% 20.9% 18.2% 14.2% 12.9% Engie Peru Utilities 7.04 8.10 HOLD 1,248 0.2 11.4 11.7 6.6 6.7 1.1 6.2% 10.0% 9.6% 5.0% 4.9% Ferreycorp Materials 2.04 2.85 BUY 587 0.4 7.3 7.7 5.6 5.7 0.9 6.9% 12.5% 11.4% 4.8% 4.2% Graña y Montero Cement & Construction 1.60 2.30 HOLD 411 0.2 0.4 13.4 13.6 4.6 4.6 0.7 0.0% 4.6% 4.1% 1.4% 1.4% IFS Banks 39.59 50.53 BUY 4,571 2.3 11.3 10.7 nm nm 2.1 4.4% 18.2% 17.1% 2.0% 1.9% InRetail Retail 35.00 46.72 BUY 3,598 2.0 23.3 18.2 9.8 8.7 2.8 0.5% 11.9% 13.6% 3.6% 4.2% Luz del Sur Utilities 21.10 17.52 BUY 3,029 0.3 17.0 17.0 12.2 11.7 nm 4.7% 20.8% 18.8% 9.8% 9.2% Minsur Mining 1.45 2.00 BUY 1,232 0.2 15.8 14.7 7.0 6.2 1.0 0.0% 6.0% 6.2% 2.5% 2.4% Nexa Resources Mining 9.22 12.32 BUY 1,229 1.2 1.2 30.5 8.7 4.8 3.8 0.5 2.6% 1.6% 5.6% 0.7% 2.5% Unacem Cement & Construction 2.03 3.10 BUY 1,088 0.4 9.8 9.2 6.4 5.9 0.9 2.6% 8.7% 8.7% 3.6% 3.8% Volcan Mining 0.44 0.60 HOLD 2,002 0.3 15.2 11.6 9.4 9.2 3.1 1.1% 5.3% 6.9% 1.6% 2.1% Peru Sample 19,008 22,910 35,630 28.7 22.0 15.0 8.0 6.9 nm 3.1% 11.5% 11.7% 3.9% 5.2%

Source: Company Reports, Credicorp Capital, & Bloomberg

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 2020E 2019E 2020E 2019E 2020E Avianca Transport 1,495 1,000 UPERF 426 0.3 0.5 -1.0 206.9 7.1 6.8 0.6 0.0% -46.5% 0.3% -6.3% 0.0% Bancolombia Banks 43,000 48,800 BUY 11,313 6.2 14.6 12.9 11.2 nm nm 1.6 2.8% 12.4% 13.2% 1.4% 1.5% BVC Financial 11,400 14,000 BUY 197 0.1 15.9 14.5 8.1 7.4 1.5 5.9% 9.0% 9.6% 7.0% 7.3% Celsia Utilities 4,320 4,100 UPERF 1,321 0.4 20.6 20.9 8.5 8.1 1.0 3.4% 5.1% 5.0% 2.0% 1.8% Cemargos Cement & Construction 7,440 7,700 HOLD 2,820 2.3 60.1 84.6 10.3 9.8 1.3 3.4% 2.1% 1.6% 0.9% 0.7% CLH Cement & Construction 4,230 5,000 HOLD 699 0.3 15.8 9.3 7.0 6.2 0.4 0.0% 2.8% 4.5% 1.4% 2.3% Conglomerates 27,780 28,800 HOLD 2,359 0.8 6.0 6.0 nm nm 1.0 2.0% 17.6% 15.4% 4.1% 3.7% Davivienda Banks 41,860 47,500 BUY 5,405 1.3 12.9 10.5 nm nm 1.6 2.3% 12.3% 13.7% 1.3% 1.4% Ecopetrol Oil&Gas 2,890 3,000 HOLD 33,969 8.8 17.5 9.3 11.3 4.8 5.2 2.2 8.4% 21.5% 17.0% 9.6% 7.5% Éxito Retail 17,620 19,530 BUY 2,255 1.9 16.5 13.9 5.5 5.7 1.2 3.0% 6.2% 7.2% 0.8% 1.1% GEB Utilities 2,205 2,350 HOLD 5,787 1.3 10.6 10.8 7.5 7.4 1.6 7.1% 14.8% 13.9% 7.3% 6.8% Grupo Argos Conglomerates 17,740 17,000 HOLD 4,074 2.2 23.0 17.2 9.6 9.0 0.8 2.1% 4.0% 5.2% 1.4% 1.8% Banks 1,285 1,360 HOLD 8,228 1.7 1.1 10.0 9.2 nm nm 1.6 4.6% 15.6% 15.9% 1.1% 1.1% Grupo Sura Conglomerates 32,720 35,300 HOLD 5,336 3.9 11.3 9.8 nm nm 0.8 1.8% 6.7% 7.3% 2.4% 2.8% Nutresa Food & Beverages 25,500 30,500 BUY 3,354 1.2 15.0 14.5 8.3 7.9 1.4 2.9% 6.6% 6.6% 3.9% 3.8% Colombia Sample 1,575 1,710 81,758 31.2 11.9 14.6 7.8 7.9 1.3 6.4% 11.6% 12.2% 2.4% 2.5% Source: Company Reports, Credicorp Capital, & Bloomberg

19 Economic Forecasts

October 2019

20 Economic Forecasts

CHILE National Accounts (YoY) 2015 2016 2017 2018 2019F 2020F Current GDP (USDmm) 244,417 250,266 277,184 299,148 290,198 311,797 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 2.9 3.3 Total Consumption (% v ar.) 2.6 2.9 2.7 3.7 3.0 3.1 Inv estment / GDP 23.8 22.7 21.1 21.3 21.5 22.1 CPI 4.4 2.7 2.3 2.6 2.8 2.8 Reference rate (end of y ear) 3.50 3.50 2.50 2.75 1.75 2.00 Ex change rate (end of y ear) 709 667 615 696 700 675 Ex change rate (av g.) 655 677 649 640 695 685 Fiscal Balance (% GDP) -2.2 -2.7 -2.8 -1.7 -2.5 -2.0 Foreign Reserves (USDmm) 38,643 40,494 38,983 39,861 40,300 41,000 Source: INE, BCCh, Dipres & Credicorp Capital Estimates

PERU National Accounts (YoY) 2015 2016 2017 2018 2019F 2020F Current GDP (USDmm) 191,517 194,745 214,332 225,259 224,000 230,500 GDP (%) 3.3 4.0 2.5 4.0 2.5 3.0 Domestic Demand (% v ar.) 2.9 1.1 1.4 4.3 2.8 3.0 Total Consumption (% v ar.) 4.9 2.8 2.2 3.6 2.6 3.1 Inv estment / GDP 23.8 22.2 20.9 21.4 21.5 21.5 CPI 4.4 3.2 1.4 2.2 2.0 2.0 Ov ernight interest rate (end of y ear) 3.75 4.25 3.25 2.75 2.25 2.00 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 3.35-3.40 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 68,800 69,000 Source: INEI, BCR & Credicorp Capital Estimates

COLOMBIA National Accounts (YoY) 2015 2016 2017 2018 2019F 2020F Current GDP (USDmm) 293,321 283,148 314,458 330,083 322,201 348,514 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 4.3 3.1 Total Consumption (% v ar.) 3.4 1.6 2.4 3.9 4.0 3.0 Inv estment / GDP 23.8 23.2 22.2 22.4 22.8 22.8 CPI 6.8 5.8 4.1 3.2 3.7 3.2 Ov ernight interest rate (end of y ear) 5.75 7.50 4.75 4.25 4.25 4.25 Ex change rate (end of y ear) 3,175 3,002 2,984 3,249 3,300 3,100 Ex change rate (av g.) 2,760 3,051 2,951 2,957 3,270 3,200 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 53,100 54,000 Source: DANE, BanRep, Bloomberg & Credicorp Capital Estimates

21 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 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.

22 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 500,000 Equal 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, Debt securities - IFS Entel, LATAM Airlines, Davivienda Bancolombia, Ecopetrol, ETB, Grupo 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, 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 BCI, Ferreycorp, Inretail, Celsia, ISA, Equity securities Canacol, EEB 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): BCI,CAP, COPEC, EISA, Falabella, Invercap, LAN, Santander, SMSAAM, SMU, HITES, Davivenda, EEB, ISA, Aceros Arequipa, AIH, Alicorp, Buenaventura, Cementos, Engiec1, Ferreycorp, Graña y Montero, IFS, Inretail, Luz del sur, Milpo, 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): BCI,CAP, COPEC, EISA, Falabella, Invercap, LAN, Santander, SMSAAM, SMU, HITES, Davivenda, EEB, ISA, Aceros Arequipa, AIH, Alicorp, Buenaventura, Cementos, Engiec1, Ferreycorp, Graña y Montero, IFS, Inretail, Luz del sur, Milpo, 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): BCI,CAP, COPEC, EISA, Falabella, Invercap, LAN, Santander, SMSAAM, SMU, HITES, Davivenda, EEB, ISA, Aceros Arequipa, AIH, Alicorp, Buenaventura, Cementos, Engiec1, Ferreycorp, Graña y Montero, IFS, Inretail, Luz del sur, Milpo, 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,Corpbanca, 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.

23 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, Corpbanca, Forus, Habitat, LATAM, Santander,Security, SK, Banco de Bogota, Bancolombia, Davivienda, Aceros Arequipa, 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, Corpbanca, Forus, Habitat, LATAM, Santander,Security, SK, Banco de Bogota, Bancolombia, Davivienda, Aceros Arequipa, 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 , 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 42% 50% 8% 0%

Compensation for investment banking 44% 16% 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.

24 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.

25 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.

26 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 of Equities [email protected] [email protected] # (562) 2446 1768 # (562) 2446 1710

CHILE PERU COLOMBIA CHILE PERU COLOMBIA

Tomás Sanhueza Daniel Córdova Sebastián Gallego, CFA German Barousse Rodrigo Zavala Juan A. Jiménez Head of Equity Research - Consumer & Head of Equity Research Peru Head of Equity Research - Banks Vice President Equity Sales Head of Capital Markets - 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) 2450 1637 # (511) 313 2918 Ext 36044 # (571) 339 4400 Ext 1701

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

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

Agustina Maira Research Coordinator [email protected] # (562)2434 6433

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

Lorena Palomeque Guido Riquelme Evangeline Arapoglou Carlos Sanchez Senior Economist Head of Capital Markets Chile Head of international FI Sales Head of Fixed Income [email protected] [email protected] [email protected] [email protected] # (562) 2446 1736 # (562) 2446 1712 # (511) 416 3333 Ext 36099 # (571) 323 9154

Juan Francisco Mas Andrés Valderrama Gustavo Trujillo Fixed Income Sales Fixed Income Sales Head of Sales [email protected] [email protected] [email protected] # (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 Pamela Horna 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. 42942 # (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

27