1. BUENAVENTURA
April 4, 2013 LALI MERINO: LMerino@inteligogroup.com
ATTRACTIVE UPSIDE POTENTIAL DESPITE T AR G E T P R I C E : $ 3 2 . 2 3
NEW OUTLOOK FOR YANACOCHA R AT I N G : BU Y +
Investment Thesis
• We are updating our BVN valuation model
Market Indicators
setting a new 12-month fundamental target
Shares outstanding (000) 254,442
price of $32.23, down from $38.95. The revision
ADR Ratio 1
to the target reflects the new production profile
Dividend yield 2013e 2.4%
for Yanacocha, our new assumptions for the
unit’s life of mine, an update of our metal prices 52-week range $24.30 - $42.25
vector and BVN’s 2013 guidance for operations. 90-day average volume (US$000) 178.2
Nevertheless, despite these changes, we believe Float 67.1%
BVN still offers investors an attractive upside Market Cap. (US$m) 6,205
potential. In this sense, our rating for BVN Price to Book Value 1.6x
stands at BUY+.
• Newmont’s guidance for Yanacocha and the Rating Parameters
disappointing performance of gold price in IQ13 Current Price $24.30
dragged down BVN’s shares. Yanacocha will cut Target price $32.23
its production by 25.7% this year as the decision Yield 12 months -38.5%
to postpone the Conga project in Cajamarca has
Upside potential 32.6%
led to revisit the unit’s output profile. However,
Rating Buy+
we believe investors have overreacted to this
Stock Ticker BVN
new information.
Sector rating Outperform
• Although Yanacocha’s gold contribution to BVN
will be lower, we expect the company to boost its
exploration efforts at current units in order to
expand the reserves & resources base. In the
case of silver, the production profile shows an BVN shares' price sensitivity ($)
upward trend as Uchucchacua will benefit from Gold $/oz price vector
the Rio Seco Manganese plant. Furthermore, the
-20% -10% 0% 10% 20%
expansion projects at El Brocal and Cerro Verde
will increase base metals production in the W 7.4% 28.19 30.81 33.42 36.03 38.65
coming years. Finally, it will be important to A 7.9% 27.59 30.20 32.81 35.42 38.03
monitor the developments around projects C 8.4% 27.02 29.63 32.23 34.84 37.44
currently not included in our valuation such as
C 8.9% 26.49 29.08 31.68 34.28 36.88
Chucapaca and Tambomayo. Regarding
Chucapaca, BVN is committed to perform 9.4% 25.97 28.57 31.16 33.75 36.35
additional studies to improve its economic
returns.
Valuation Changes
• We have changed the production profile for
Yanacocha and assumed a life of mine until
depletion of reserves only.
• We have reduced our gold price vector.
• We have cut the contribution from El Brocal, to
exclude exploration projects, as well as from
Cerro Verde given the 2013 production guidance
from BVN.
INTELIGO SAB
2. Over the last months, BVN’s shares have been YTD Performance
severely affected by news from Yanacocha. In 110 Newmont releases
2013 outlook
January, Newmont provided the operating guidance
for this unit and the results were below market 100
expectations, triggering a sell-off in these securities. In
addition, the disappointing performance of gold in 90
IQ13 contributed to BVN’s decline. Despite the new
outlook for Yanacocha, we believe the market has 80
overreacted and severely chastised BVN’s shares. At
current market prices, the stock offers investors an 70
attractive upside potential based on gold price Gold BVN
perspectives, encouraging outlook for silver production 60
2-Apr
5-Feb
12-Feb
19-Feb
26-Feb
12-Mar
19-Mar
26-Mar
1-Jan
8-Jan
15-Jan
22-Jan
29-Jan
5-Mar
at Uchucchacua and expansion projects at El Brocal
and Cerro Verde. Furthermore, following BVN’s growth
Source: Bloomberg
history, backed by the start up of four mines in the last
years, and exploration potential, we expect BVN to continue delivering value in the foreseeable future.
Gold Price Performance
• Gold price performance has been sluggish so far this year. Investors demand has lacked strength
and ETFs gold holdings fell after posting records in December 2012. Even though the FED
announced a new round of asset purchases in an open-ended mechanism last year, mixed
comments from the FED’s officials in February regarding the possibility of reducing the size of the
QE3 or even halting the overall program sooner-than-anticipated exacerbated the decline of gold.
ETFs Gold holdings Precious metals performance
000 troy ounces
90,000 2,000 50.00
85,000 45.00
1,800
80,000
40.00
75,000 1,600
70,000 35.00
1,400
65,000 30.00
60,000
1,200
25.00
55,000 Gold ($/oz) Silver ($/oz)
50,000 1,000 20.00
Jan-11
Sep-11
Nov-11
Jan-12
Sep-12
Nov-12
Jan-13
Jul-11
Jul-12
May-11
May-12
Mar-11
Mar-12
Mar-13
Oct-10
Apr-11
Oct-11
Apr-12
Oct-12
Apr-13
Aug-10
Dec-10
Jun-11
Aug-11
Dec-11
Jun-12
Aug-12
Dec-12
Feb-11
Feb-12
Feb-13
Source: Bloomberg Source: Bloomberg
• Another reason behind gold’s weak performance is that the global economic activity is showing signs
of reacceleration, boosting investors risk appetite and benefiting equity markets. In the US,
encouraging labor data led the unemployment rate back to December 2008 levels in February.
Furthermore, in China, manufacturing indicators remained within the expansionary area, while credit
growth started to accelerate. In this scenario of a mild pick-up in activity, inflation remained anchored,
reducing the attractiveness of inflation-hedging assets such as gold.
• Despite these recent developments, we believe gold’s fundamentals remain intact. Even in a
scenario when the FED halts its QE program, the size of the FED’s balance sheet is in itself a sign of
a loose monetary policy. This coupled with the somewhat weak economic scenario in the Euro area,
which allows the ECB to maintain its current monetary policy, and the recent changes in the Bank of
Japan’s leadership also supports the scenario for gold. Furthermore, the FED’s commitment to
maintain rates at low levels as long as the unemployment rate remains above 6.5% and inflation
stands below 2.5% supports our view about the central bank’s stance, at least for 2013.
• In this scenario and as US activity accelerates its growth pace -with more momentum in IIH13-
inflation expectations should begin to increase pushing real yields down and backing investors’
2
INTELIGO SAB
3. demand for gold holdings. On a longer term basis, when growth reaches a sustainable path and
unemployment is no longer an issue of concern for FED officials, monetary policy tightening is
expected and appetite for gold should recede.
• Another factor that has been gaining importance in recent years is the demand from central banks.
As stated by the World Gold Council in its last report, central banks have continued to increase their
gold holdings as well as Yen, in order to reduce the share of Dollars and Euros in reserves.
• Furthermore, the characteristic of gold as a safe-haven asset has been reaffirmed with the recent
developments around Cyprus. As European leaders worked on the conditions for a bailout, gold
managed to break the $1,600 level after weeks of poor performance. Although the risks around the
Euro area crisis are lower than before, the events around Cyprus recalled that fiscal issues in the
region, especially in Italy and Spain, are still pending.
• All in all, given the YTD performance of gold, we have adjusted downwards our price vector. Average
gold prices for 2013 and 2014 now stand at $/oz 1,700 and $/oz 1,689 down from $1,775 and $1,750,
respectively.
Precious Metals
Average Prices 2010 2011 2012 2013e 2014e 2015e
Gold $/oz 1,227 1,573 1,669 1,700 1,689 1,550
Silver $/oz 20.24 35.32 31.16 32.00 31.00 28.50
• As in the case of gold, silver also disappointed in the first months of the year. Nevertheless, we
continue to expect prices to recover from current levels. In this scenario, we are setting our 2013 and
2014 average silver forecasts at $/oz 32.00 and $/oz.31.00, respectively. Finally, it is worth to
mention that we also made slight adjustments to our base metals vector. These include a lower
average copper price for 2013 and zinc for 2014 in comparison with our previous estimates.
Base Metals
Average Prices 2010 2011 2012 2013e 2014e 2015e
Copper $/lb 3.42 4.00 3.61 3.69 3.50 3.34
Zinc $/Mt 2,159 2,193 1,947 2,155 2,250 2,315
Lead $/Mt 2,147 2,397 2,062 2,280 2,348 2,380
Tin $/Mt 20,408 25,958 21,077 23,780 24,000 24,065
Operations
Gold
• BVN’s equity production, excluding Gold Output (000 oz)
Yanacocha, averaged 460,000 oz Au in the 1,400
last years. On the other hand, Yanacocha’s
output has gradually lost ground. In 2009, 1,200
Yanacocha produced 2.1 million oz Au, with 1,000
898K oz attributable to BVN. In 2013, 800
according to the company’s guidance, output
should stand at 1.0 million oz, with only 437K 600
oz attributable to BVN. Despite the gloomy 400
outlook for this unit, we believe that BVN will 200
increase its exploration efforts in order to
sustain production from direct operations as 0
2011 2012 2013e 2014e
well as revisit the Chucapaca project (not
included in our target price). In terms of Gold Direct Production Yanacocha
Source: BVN, Inteligo's estimates
3
INTELIGO SAB
4. growing strategy, BVN has delivered four mines over the last years: La Zanja (2010), Tantahuatay
(2011), Mallay (2012)1 and Breapampa (2012). In this regard, we foresee that the company will
maintain this strategy along with the aforementioned expansion of current operations. Below, we
describe the situation of the company’s major gold operating assets.
1. Orcopampa (BVN 100%)
o Orcopampa is the main gold producer among BVN’s direct operations. With an average annual
production of 288K oz Au, including contribution from old tailings, this unit will be in the spotlight
this year as the company will continue to invest in exploration in order to boost reserves and
increase the unit’s life of mine. The recent reserves update has already shown higher yearend
reserves in 2012.
o Looking back into production, lower grades hit output at this unit in the last years. This scenario
coupled with the presence of some strikes affected gold production in 2012, reaching 260K oz (-
8.7%). For 2013, BVN’s guidance points to higher production, up to around 280K oz (+7.4%).
Orcopampa*
(000 oz Au)
400
350
300
250
200
150
2010 2011 2012 2013e
*Includes old tailings.
Source: BVN
2. La Zanja (BVN 53.06%)
o La Zanja is composed of two deposits: San Pedro Sur and Pampa Verde. Production at the San
Pedro Sur deposit began in September 2010 for a total of 44K oz Au, from which 23K oz were
attributable to BVN. The guidance for this unit was set at 100K oz; nevertheless, in 2011, output
surpassed expectations due to higher-than-anticipated grades. In 2012, production stood at 112K
oz and in the coming years we expect output to stabilize at the original guidance. Silver output
from this unit was also important, reaching 388K oz Ag in 2012.
3. Tantahuatay (BVN 40.04%)
o The Tantahuatay operation started production in 2011 and is composed of two deposits:
Tantahuatay 2 and Cienaga Norte. Operations began at Tantahuatay 2 and the company is
currently working on the construction of the Cienaga Norte project as part of the unit’s expansion.
In 2012, gold output stood at 141K oz and for 2013 BVN anticipates producing around 125K oz.
Regarding silver, total production at Tantahuatay reached 919K oz in 2012.
4. Breapampa (BVN 100%)
o In November 2012, Breapampa began operations and accounted for 9K oz Au of BVN’s
production last year. The initial project’s outline set a target of around 60K oz Au. For valuation
purposes we are only accounting reserves from the Parccaorcoo prospect, which leads to a two-
year life of mine. Nevertheless, BVN could eventually consider the treatment of the resources
from the Senccata and Pucagallo porspects in order to expand operations.
1
Producer of silver, lead and zinc
4
INTELIGO SAB
5. 5. Yanacocha (BVN 43.65%)
o Yanacocha has been in the spotlight since the unveiling of protests around the Conga project.
Furthermore, the decision of Newmont to suspend the Conga project until 2017 and prioritize the
construction of the reservoirs to support water availability for Cajamarca has led the company to
review its production profile for coming years.
o Considering the reserves base only, Yanacocha’s life of mine reaches 6.0 years. Given the
negative mood around the Yanacocha operation in Cajamarca, we are including only reserves into
our valuation model as this stands as more conservative approach. In this scenario, we expect to
see production at around 1.0m oz Au in 2013, while gradually declining to 0.8m oz Au in 2016.
These figures contrast with historical production levels, which stood at 1.4m oz on average in the
last three years.
o The decline in Yanacocha’s output should have an impact on the company’s operating
performance, which in turn will be reflected in a lower contribution to BVN’s consolidated net
earnings. According to our estimates and our new gold price vector, Yanacocha’s contribution to
BVN result should stand at $205m in 2013. In this context, in terms of valuation, Yanacocha now
accounts for $8.04 of our target price.
Yanacocha
(000 oz Au)
1,550
1,350
1,150
950
750
550
2010 2011 2012 2013e
Source: BVN
o As for the future of Yanacocha, BVN is looking forward to reactivate the Chaquicocha (gold) pit by
expanding the unit and exploring underground opportunities in high grade areas. In this context,
exploration works at the site will be performed in 2013 in order to identify additional reserves
potential. It is worth to highlight that we are not including this guidance on our financial model until
reserves are effectively increased. Moreover, on its annual report, BVN announced the
construction of a pilot leaching facility to treat sulfides. Nevertheless, this project is in early stage
and the results are yet to be seen.
Silver
• As opposed to gold, silver equity production has shown a favorable performance, increasing from
15.5m oz in 2010 to 18.3m oz in 2012, guided mainly by the higher contribution from Uchucchacua,
Julcani, La Zanja, Tantahuatay and, recently, Mallay. For the coming years, the production profile is
encouraging, mainly due to the higher recovery rates at Uchucchacua.
5
INTELIGO SAB
6. Silver Output (million oz)
25.0
20.0
15.0
10.0
5.0
0.0
2011 2012 2013e 2014e
Source: BVN, Inteligo's estimates
1. Uchucchacua (BVN 100%)
o Uchucchacua is BVN’s main silver producer, accounting for 61.5% of total equity production in
2012. Last year silver output climbed 11.6% on the back of higher ore treated and recovery rates.
Looking forward, we foresee further improvements in recovery rates, supported by the start of
operations of the Rio Seco manganese sulfate plant this year. The purpose of this plant is to
enhance the quality of the lead/silver concentrates from Uchucchacua by reducing the
manganese content.
Uchucchacua
(million oz Ag)
14.0
12.0
10.0
8.0
6.0
4.0
2010 2011 2012 2013e
Source: BVN
2. Julcani (BVN 100%)
o Julcani was the first of BVN’s operations when the company was founded in 1953. As a silver
producer, Julcani accounts for 13.3% of total BVN’s equity production in 2012, and has seen its
output expand from 1.8m oz in 2009 to 2.4m oz Ag in 2012. In addition, given the increase in
reserves, BVN expanded the unit’s plant from 400tpd to 500tpd, adding to the favorable outlook
for the company’s silver output.
3. Mallay (BVN 100%)
o This unit began operations in May 2012, with a total silver output of 683K oz. For 2013, we
foresee production at around 1.2m oz Ag, explaining part of the increase in total equity output.
Base metals
• El Brocal and Cerro Verde account for most of BVN’s equity zinc and copper production. In both
operations, expansion projects are in progress and are expected to boost base metals production in
coming years.
6
INTELIGO SAB
7. 1. El Brocal (BVN 53.76%)
o El Brocal is a zinc, lead and copper El Brocal fine ores (000 MT)
producing company with two defined 120
deposits: Tajo Norte (zinc – lead) and
100
Marcapunta Norte (copper). Last year, in
addition to base metal concentrates, El 80
Brocal produced 13K MT of silver
60
concentrates from stockpiles.
40
o As mentioned above, El Brocal is in the
20
process of expanding its concentrator
capacity to 18,000tpd by IIIQ13. In fact, in 0
2012, El Brocal reached a capacity of 2011 2012 2013e 2014e
11,235tpd and according to our estimates, Lead Zinc Copper
the company will be working at a 14,400tpd Source: El Brocal, Inteligo's estimates
rate on average this year. Following the
project’s completion this year and the original guidance from the company, zinc and lead output
should benefit the most from the expansion while copper production is expected to remain around
current levels.
o In addition to the concentrator expansion, El Brocal has two projects: San Gregorio and
Marcapunta Oeste. In 2012, El Brocal invested heavily in exploration works at San Gregorio
($11.3m); nevertheless, drilling works at this moment are in standby as the Vicco community
cancelled the exploration permits amid disagreements inside the community. We expect works to
resume in the mid-term. In the case of Marcapunta Oeste, there have not been major
announcements; nonetheless, BVN is studying methods for the treatment of copper ores with
arsenic content. These studies and the development of technology will also benefit the potential of
the Tantahuatay operation as a similar content can be found in certain areas currently not
included in our valuation. Given that these projects are still in exploration phase, we consider that
their exclusion from our financial model stands as a more conservative approach and provides a
better assessment of the operation’s value.
o Regarding total capital expenditures at El Brocal, we have increased our 2013 estimate to $91.5m
given the recent increase in the expansion project’s budget from $254.4m to $305.1m. The
revision to budget reflects higher-than-expected ground movement works as well as higher
machinery costs. All in all, taking into account BVN’s guidance on El Brocal for 2013, the capex
adjustment, our slight revision to the base metal price vector and our decision to exclude the San
Gregorio and Marcapunta Oeste in situ values, El Brocal now accounts for $3.11 of BVN’s
target, which entails a PEN 33.35 target for El Brocal C shares.
2. Cerro Verde (BVN 19.58%)
o In December 2012, Cerro Verde received
Cerro Verde Copper Output (million lb)*
the approval of the Environmental Impact
Assessment for the operation expansion. 1,200
This project will increase the company’s 1,050
concentrator capacity from 120,000tpd to 900
360,000tpd, with a total budget of $4,400
750
million and 2016 as the completion date.
Construction works should begin this year 600
given that permits have already been 450
received. Considering that an increase in 300
the volume of ore treated will have an
150
impact on grades, the expansion will
ultimately boost copper production by 600m 0
2011 2012 2013e 2014e 2015e 2016e
lb and molybdenum by 15m lb when
compared to a non-expansion scenario. *Cathodes equivalent
Source: Cerro Verde, Inteligo's estimates
According to Freeport, after the expansion,
copper output should reach 1,100m or an equivalent of 500K MT per year.
7
INTELIGO SAB
8. o In our strategy report (January 2013), we assumed that Cerro Verde’s output will recover this year
given that last year’s performance was affected by heavy rains in Arequipa and lower SXEW
copper grades. Nonetheless, we are changing our assumptions on the production profile following
BVN’s guidance. According to the company, copper output should reach approximately 260K MT,
lower than 2012 figures. In addition, we do not foresee a major improvement in output in the 2014-
2015 period as the company is directing its efforts towards the expansion project. In this scenario,
we have adjusted downwards our production profile for Cerro Verde, with an average copper
production (cathodes equivalent) of 585m lb from 2013 to 2015. From there on, the expansion
should take place and we foresee that the full benefits will be tangible in 2016. In addition, given
the guidance provided for the company, we have increased the 2013 capital expenditure budget to
$1,200m. Please note that in terms of the company’s net result, we are no longer including the
disbursements for the wastewater treatment plant as part of non-operating expenses given that
they will be included as capex.
o Taking into account the new production profile, the downward revision to the average copper price
for 2013 and the higher-than-expected 2013 capex budget, we are cutting our Cerro Verde
contribution to BVN’s target to $9.38. In terms of our Cerro Verde C shares valuation, the
new target price stands at $34.81, down from $40.86. Although we are assuming that the
benefits of the expansion will be tangible by 2016, a sooner-than-anticipated completion date or
ramp up ahead of expectations stand as the main upside risk to our valuation.
BVN’s Projects
• In the previous section, we mentioned the Rio Seco processing plant as one of the projects that is
due this year. The plant will benefit the lead-silver concentrates from Uchucchacua, by increasing
silver recovery. According to the schedule provided by the company, construction should be
completed by May with a total capex of $90m. In addition, the expansion of the concentrator plant
at El Brocal should be ready by June 2013, while the Cerro Verde expansion by 2016.
• Besides the aforementioned, BVN has additional exploration projects which are not currently included
in our valuation model. Furthermore, as stated in our strategy report, the risks behind the Conga
project back our decision to exclude it from our target price:
o Conga: Conga is a gold/copper deposit with a total of 12.6m oz Au and 3,300m lb Cu in reserves
(5.5m oz Au and 1,400m lb Cu attributable to BVN). Following the review of the EIA by
international experts, in June 2012, Newmont Mining announced its intention to postpone the
Conga project and instead focus on the construction of the water reservoirs. The construction of
the reservoirs is moving forward; nevertheless, the risks around the project’s execution remain as
the regional government of Cajamarca has consistently revealed its opposition to the project. In
fact, on its 2012 annual report, Newmont Mining stressed that the development will depend on the
project’s ability to generate acceptable returns as well as getting local support. In the case Conga
does not move forward, Newmont will consider reallocating capital to other projects in Nevada,
Australia, Indonesia and Ghana.
o Chucapaca (BVN 49%, Gold Fields 51%): Located in Moquegua, Chucapaca is a gold/copper
deposit with 6.0m oz Au in total resources. In November 2012, a first draft of the Feasibility Study
concluded that the project’s design (open pit operation of 30,000 tpd) demanded an investment
with no acceptable returns. As a result, BVN and Gold Fields are committed to perform additional
studies in order to redesign the project (underground/ combination of underground and open pit)
and review capital costs. Moreover, additional exploration in the area will be performed. In this
sense, new guidance on the project is expected by the end of the year.
o Tambomayo (Au/Ag) and Trapiche (Cu): Both projects are in advanced exploration stage and
drilling works are being performed. In Tambomayo, BVN is evaluating a 1,000tpd flotation plant;
nevertheless, we expect further guidance and definition before adding the project to our valuation.
8
INTELIGO SAB
9. Target Price Determination
Target Price Composition ($32.23)
• We have determined our BVN target price using
a DCF model. We apply a NAV multiple of 1.5x BVN (precious metal operations) El Brocal Cerro Verde
to BVN’s precious metal operations including
Yanacocha and add the contribution from El 29%
Brocal and Cerro Verde, which are valued
separately.
• According to our analysis, we set a 12-month
fundamental target price of $32.23 and a 61%
BUY+ rating for BVN shares. At current market 10%
prices, our valuation entails an upside potential of
32.6%.
Source: Inteligo's estimates
Comparables Analysis
• On the back of a comparable analysis, BVN P/E ratios stand significantly below the industry’s
average, signaling that the company is relatively undervalued. As stated in our investment thesis,
BVN’s shares have suffered from an overreaction to news from Yanacocha and gold price
movements. In this sense, as our fundamental analysis suggests, there is an interesting upside
potential investors can capture.
P/E P/E EV/EBITDA EV/EBITDA
Company Country
12m 2013e 12m 2013e
BVN Peru 9.1 8.5 9.9 7.3
Yamana Gold Canada 21.8 13.1 8.9 6.8
Goldcorp Canada 16.5 16.0 10.7 8.2
Barrick Gold Canada 7.2 6.6 6.7 5.1
Kinross Gold Corp Canada 9.1 10.3 6.0 4.3
Newmont Mining US 10.2 9.7 7.4 6.0
Newcrest Mining Australia 18.2 19.7 11.8 10.5
Average 13.2 12.0 8.8 6.9
Source: Bloomberg, Inteligo's estimates
Risk to our valuation
• Volatility in commodity markets: Although fundamentals in precious metal markets remain, the
possibility that prices fell short of our expectations is a downside risk to our valuation. In this sense, it
will be important to monitor the FED’s monetary policy stance as changes in the committee’s view
could push gold price further down.
• Social conflicts: Despite the fact that Conga is not in our base case scenario, the construction of the
water reservoirs could trigger additional disruptions in the area, adding volatility to BVN shares.
Overall, the government’s stance towards social conflicts will guide market agents’ sentiment towards
the mining sector.
• Projects not included in our valuation: We will monitor further developments around the
Chucapaca project as its execution should help boost gold production in coming years. In addition,
the definition of the Tambomayo and Trapiche projects stands as an upside bias to our valuation.
9
INTELIGO SAB
13. Analyst Certification
The Research Analyst that prepared this report hereby certifies that the views expressed in it accurately reflect his/her
views about the subject companies and their securities. The Analyst also certifies that he/she has not been, is not,
and will not be receiving direct or indirect compensation for expressing the specific view in this report.
General
The information in this report has been obtained from sources believed to be reliable; however, Inteligo SAB does not
warrant its completeness or accuracy except with respect to any disclosures relative to Inteligo SAB and the analyst’s
involvement with the issuer. Inteligo SAB accepts no liability, of any type, for any direct or indirect losses arising from
the use of the document or its contents. Opinions and estimates constitute our judgment as of the date of this material
release and are subject to changes without further notice. Past performance is not indicative of future results. The
market prices of securities or instruments or the results of investments could fluctuate against the interests of
investors. Investors should be aware that they could even face a loss on their investment. This material is not
intended as an offer or solicitation for the purchase or sale of any financial instrument. The opinions and the ratings
herein do not take into account individual client circumstances, objectives, or needs and are not intended as
recommendations of particular securities, financial instruments or strategies to particular clients. Therefore, investors
should make their own investment decisions considering the said circumstances and obtain such specialized advice
as may be necessary. Neither shall this document nor its contents form the basis of any contract, commitment or
decision of any kind. The recipient of this report must take its own independent decisions regarding any securities or
financial instruments mentioned herein.
Inteligo SAB, as well as their executives and employees may have a position in any of the securities or instruments
referred to, directly or indirectly, in this document, or in any other related thereto. They may trade for their own
account or for third-party accounts in those securities, provide consulting or other services to the issuer of the
aforementioned securities or instruments or to companies related thereto or to their shareholders, executives or
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investments before or after the publication of this report, to the extent permitted by the applicable law.
Methodology & Rating System
Inteligo SAB’s stock ratings are set on a twelve-month basis against relevant benchmarks. There are four stock
ratings: BUY +: Upside potential above the “normal” risk-adjusted return of the ISBVL; BUY: Upside potential above
the “normal” risk free rate for Peru; HOLD: Stock is expected to maintain investors capital relatively unchanged;
SELL: Stock is expected to cause a capital loss for investors.
Expected ReturnStockX<0% SELL
0%<Expected ReturnStockX<11% HOLD
11%<Expected BUY
ReturnStockX<21%
21%<Expected ReturnStockX BUY+
Inteligo SAB’s calculation of price targets is based on a combination of one or more methodologies generally
accepted among financial analysts, including, but not limited to, comparable valuations, discounted cash flows,
whether in whole or by parts, or any other method which may be applied. The determination of a price target does not
imply any warrant that it will be attained, since this depends on other intrinsic and extrinsic factors that affect both the
performance of the company and trends in the stock market on which it is based.
Security Restrictions
No part of this document may be (I) copied, photocopied or duplicated by any other form or means (ii) redistributed or
(iii) quoted without the consent of Inteligo SAB.
INTELIGO SAB
