Bancolombia S A : Breakfast January 14- 2020 (web).pdf

Breakfast with Bancolombia

Equities Bancolombia - Tables & Graphics

Economic, Industry and Market Research

January 14, 2020

Breakfast with Bancolombia

Equity Market

COLCAP Index Performance

LATAM Markets Performance*

1.800
1.700
1.600
1.500
1.400
1.300
1.200
Jan-17	Jul-17	Jan-18	Jul-18	Jan-19	Jul-19	Jan-20

Source: Grupo Bancolombia, Bloomberg.

Colcap vs Andean Region

INDEX	Close	1 Day	YTD	YTD	1 YR	1 YR
USD	USD
COLCAP	1.652	-0,2%	-0,6%	-0,2%	19,0%	14,2%
BOVESPA	117.325	1,6%	1,5%	-1,4%	25,3%	12,5%
IPSA	4.959	-0,7%	6,2%	3,1%	-7,4%	-19,3%
SPBLPGPT	20.476	0,1%	-0,5%	-1,1%	4,4%	4,8%
MEXBOL	44.847	0,4%	2,7%	3,3%	3,0%	4,8%

Source: Grupo Bancolombia, Bloomberg.

*To last night's closing level

Colcap vs Bovespa & Mexbol

	Colcap	IPSA	SPBLPGPT
130
120
110
100
90
80
Jan-19	Apr-19	Jul-19	Oct-19

Source: Grupo Bancolombia, Bloomberg

	Colcap	Bovespa	Mexbol
130
120
110
100
90
Jan-19	Apr-19	Jul-19	Oct-19

Source: Grupo Bancolombia, Bloomberg

Colcap Top Advancers*		Colcap Top Decliners*

Equity	Precio de	Variación
cierre	diaria
ISA	19.960	1,5%
Mineros	3.250	1,2%
Ecopetrol	3.420	0,6%
Bancolombia pref	44.580	0,5%
Grupo Sura ord	33.600	0,4%

Equity	Closing Price	Daily
Variation
CLH	4.240	-3,5%
Bogota	86.040	-3,2%
Grupo Argos pref	12.880	-2,9%
Cemargos pref	5.400	-2,2%
Éxito	13.340	-1,9%

Source: Grupo Bancolombia, Bloomberg.	Source: Grupo Bancolombia, Bloomberg.
*To last night's closing level	*To last night's closing level

Breakfast with Bancolombia

Equity Market

Balance in REPOS on local shares		REPOS and total shares outstanding of the underlying
	stock

Billions COP

1,760
1,560
1,360
1,160
960
760
560
360
Jan-10	Jan-12	Jan-14	Jan-16	Jan-18	Jan-20

Source: Grupo Bancolombia, Bloomberg

Equity	Number of Shares	Shares	%
in Repos	Outstanding
PFAVAL	126.020.797	7.116.706.674	1,8%
CORFICOLCF	2.815.679	279.912.944	1,0%
CEMARGOS	5.574.315	1.151.672.310	0,5%
ISA	4.825.930	1.107.677.894	0,4%
PFDAVVNDA	423.563	107.993.484	0,4%
GEB	21.233.600	9.181.177.017	0,2%
GRUPOARGOS	1.320.918	645.400.000	0,2%
NUTRESA	916.885	460.123.458	0,2%
CELSIA	1.830.685	1.069.972.554	0,2%

Source: Grupo Bancolombia, Bloomberg

Our Coverage Universe

Equity	13-ene.	Last review	12-month target price	Expected	Total Return	Recommendation
Base	Var (%)	Dividend Yield
COLCAP	1652	nov.-19	1870	13,2%
Avianca	$ 1.720	nov.-19	$ 3.230	87,8%	0,0%	87,8%	Overweight*
Bogotá	$ 86.040	nov.-19	$ 86.200	0,2%	4,5%	4,7%	Underweight
Canacol	$ 11.300	nov.-19	$ 15.380	36,1%	0,0%	36,1%	Overweight
Celsia	$ 4.460	nov.-19	$ 5.500	23,3%	4,3%	27,6%	Overweight
Cemargos	$ 6.660	nov.-19	$ 9.750	46,4%	3,8%	50,2%	Overweight
Cemex Latam Holdings	$ 4.240	nov.-19	$ 9.200	117,0%	0,0%	117,0%	Overweight*
Conconcreto	$ 485	nov.-19	N.A	N.A	N.A	N.A	Under review
Corficol	$ 31.840	nov.-19	$ 35.600	11,8%	5,1%	17,0%	Overweight*
Davivienda	$ 44.000	nov.-19	$ 45.300	3,0%	2,1%	5,1%	Underweight
Ecopetrol	$ 3.420	nov.-19	$ 3.370	-1,5%	5,0%	3,5%	Marketweight
El Cóndor	$ 1.370	dic.-19	$ 3.330	143,1%	3,8%	146,9%	Overweight
ENKA	$ 7,57	nov.-19	$ 19	152,3%	0,0%	152,3%	Overweight
ETB	$ 270	nov.-19	$ 470	74,1%	0,0%	74,1%	Overweight*
GEB	$ 2.270	nov.-19	$ 2.550	12,3%	6,2%	18,5%	Overweight
Grupo Argos	$ 18.160	nov.-19	$ 22.000	21,1%	2,0%	23,1%	Marketweight
ISA	$ 19.960	nov.-19	$ 20.500	2,7%	2,9%	5,6%	Underweight
Nutresa	$ 24.920	nov.-19	$ 34.000	36,4%	2,6%	39,0%	Overweight
Promigas	$ 7.970	nov.-19	$ 7.510	-5,8%	4,6%	-1,1%	Underweight
Terpel	$ 10.300	nov.-19	$ 17.720	72,0%	5,7%	77,8%	Overweight
* speculative

Source: Grupo Bancolombia, Bloomberg

Breakfast with Bancolombia

Local Equity Market

	Closing						Performance				Multiples
	Mkt Cap	Volume	%											1 YR ADTV
Index(Stock	Price						PE (x)	EV/EBITDA (x)	Div
(US$ mn)	(US$)	Volume			12	52 Weeks 52 Weeks	(US$)
	(COP)			Yield (%)
	1 Day	YTD
				Months	Min	Max
							2019E	2020E	2019E	2020E	2019
COLCAP	1.652	109.694	-	-	-0,2%	-0,6%	19,0%	1.377,6	1.677,6	0,0	0,0	0,0	0,0	-	0,0
Avianca Holdings PF*	1.720	524	202.289	0,7%	-1,7%	-6,3%	-4,2%	1.035,0	2.015,0	9,0	3,0	5,3	5,3	2,9%	287.363,7
Bancolombia	42.540	12.795	992.807	3,5%	-0,2%	-3,3%	27,0%	32.220,0	45.500,0	12,1	10,7	na	na	2,6%	2.634.100,9
Bancolombia PF	44.580	12.795	4.339.842	15,3%	0,5%	-2,7%	31,1%	33.540,0	47.000,0	12,7	11,2	na	na	2,4%	6.341.741,2
Banco de Bogota	86.040	8.717	109.205	0,4%	-3,2%	1,1%	48,3%	56.100,0	90.000,0	na	na	na	na	4,5%	244.449,9
BVC	11.600	215	0	0,0%	0,0%	0,0%	-2,4%	10.500,0	12.600,0	na	14,7	na	na	9,7%	124.214,3
Canacol*	11.300	620	86.151	0,3%	0,0%	-5,5%	12,5%	9.520,0	13.000,0	15,3	6,4	6,1	3,7	na	354.087,6
Celsia*	4.460	1.459	232.928	0,8%	-1,2%	1,1%	12,6%	3.930,0	4.680,0	44,3	18,9	8,9	7,9	4,1%	373.094,5
Cementos Argos*	6.660	2.691	910.685	3,2%	-1,6%	-8,8%	-6,2%	6.040,0	8.400,0	51,8	51,2	9,8	8,5	3,6%	2.868.305,4
Cementos Argos PF	5.400	2.691	31.700	0,1%	-2,2%	-4,9%	-2,9%	4.990,0	7.320,0	29,8	34,2	10,7	11,0	4,5%	169.407,1
CLH*	4.240	750	90.026	0,3%	-3,5%	-3,7%	10,6%	3.835,0	5.640,0	37,2	16,3	7,7	7,2	0,0%	260.439,9
Corficol	31.840	2.892	407.164	1,4%	-0,5%	3,4%	107,4%	14.832,2	32.600,0	na	na	na	na	5,2%	711.700,2
Davivienda PF	44.000	6.078	390.865	1,4%	-0,7%	-4,3%	28,4%	33.800,0	45.980,0	12,2	9,9	na	na	1,9%	1.372.647,0
Ecopetrol*	3.420	43.006	4.123.676	14,5%	0,6%	3,2%	17,9%	2.545,2	3.425,0	10,0	11,3	5,1	5,4	8,2%	7.352.196,2
GEB*	2.270	6.374	3.120.932	11,0%	0,2%	2,3%	26,5%	1.775,0	2.320,0	10,2	9,9	10,6	10,2	na	1.311.532,6
Éxito*	13.340	1.826	134.584	0,5%	-1,9%	-3,9%	1,8%	12.720,0	17.980,0	23,4	14,0	0,7	5,7	2,3%	2.361.716,5
Grupo Aval PF	1.465	9.867	3.026.602	10,7%	0,0%	0,3%	35,6%	1.025,0	1.480,0	10,9	9,6	9,0	8,3	4,1%	1.715.589,0
Grupo Sura	33.600	5.811	1.121.269	4,0%	0,4%	-1,2%	4,1%	31.020,0	37.500,0	11,3	9,5	na	na	1,6%	2.914.336,0
Grupo Sura PF	28.700	5.811	127.866	0,5%	-0,2%	-2,0%	-7,1%	26.280,0	35.600,0	9,6	8,1	na	na	1,9%	1.459.244,2
Grupo Argos	18.160	4.419	797.949	2,8%	-1,3%	2,0%	6,3%	15.120,0	18.980,0	25,0	24,5	16,7	16,5	1,9%	1.648.360,3
Grupo Argos PF	12.880	4.419	188.827	0,7%	-2,9%	-4,6%	-6,3%	12.540,0	16.000,0	na	na	na	na	2,7%	367.463,5
ISA*	19.960	6.762	2.047.755	7,2%	1,5%	1,8%	38,8%	13.740,0	20.880,0	15,6	16,4	8,9	7,6	2,8%	2.466.879,6
Nutresa*	24.920	3.507	583.246	2,1%	-0,9%	-1,9%	5,6%	23.500,0	27.180,0	14,9	12,5	8,0	7,6	2,5%	1.204.126,2
Promigas	7.970	2.766	0	0,0%	0,0%	-0,4%	48,1%	5.104,4	8.432,3	na	na	na	na	5,2%	261.531,6
Mineros	3.250	260	8.105	0,0%	1,2%	0,0%	62,5%	1.800,0	3.565,0	na	na	na	na	21,5%	113.446,3
Non-index:
Terpel*	10.300	571	86.297	0,3%	0,0%	3,0%	7,3%	9.050,0	11.300,0	9,2	6,0	4,7	4,9	3,6%	131.783,3
Conconcreto	485	168	11.494	0,0%	0,4%	6,8%	31,1%	307,0	592,0	na	na	na	na	0,0%	44.500,3
ETB	270	293	30.452	0,1%	-1,5%	4,2%	6,3%	194,0	300,0	na	na	na	na	0,0%	69.281,5
Grupo Aval	1.440	9.867	4.124	0,0%	0,0%	-1,7%	32,7%	1.045,0	1.500,0	10,7	9,4	9,0	8,3	4,2%	100.929,4
El Cóndor	1.370	241	174.548	0,6%	0,0%	4,2%	29,2%	1.015,0	1.375,0	na	na	na	na	11,9%	38.503,7
Enka*	10	36	0	0,0%	0,0%	0,0%	41,6%	7,5	11,4	8,1	6,4	4,2	3,4	0,0%	9.324,0
Fabricato	6	15	0	0,0%	0,0%	10,0%	-15,4%	5,0	8,0	na	na	na	na	0,0%	8.009,3
HCOLSEL	15.372	420	0	0,0%	-0,1%	-0,3%	20,5%	12780,5	15464,0	na	na	na	na	na	1.707.504,1
*P/E and EV/EBITDA estimated by Bancolombia

Source: Grupo Bancolombia, Bloomberg

Economic Calendar and Forecasts

Panamá	CPI MoM	Dec	15/01/2020	--	0.0%
	Consumer Confidence Index	Dec	16/01/2020	-7.9	-14.4
Colombia	Retail Sales YoY	Nov	17/01/2020	5.5%	7.4%
	Manufacturing Production YoY	Nov	17/01/2020	1.4%	2.1%
El Salvador	Overseas Remittances YoY	Dec	17/01/2020	--	7.9%

Source: Grupo Bancolombia, Bloomberg

Breakfast with Bancolombia

Colcap

The local equity market returned to red ground this Monday with no clear factors driving the trend. Notably, as it happened last week, Colombian equities decline coincided with that on several regional peers while contrasted with the advances in most of the developed markets. Trading volume remained subdued during most of the session though slightly recovered in the afternoon. In any case it continued to reflect a below average transactional dynamism.

The Colcap index declined by 0.18% to 1,651.93 pts, accumulating YTD variation of -0.63% in local currency and -

0.17% in USD. The session traded COP 92,702.3 mn / USD 28.3 mn with a 22.32% concentration in the closing auction. ETF trading accounted for 21.2% of total traded before the closing auction. The main cross trades were presented at HCOLSEL and GEB.

Best performers were: ISA (1.53%), MINEROS (1.25%) and ECOPETROL (0.59%).

Main decliners were: CLH (-3.53%), BOGOTA (-3.22%), PFGRUPARGOS (-2.87%)

CLH: DIAN denies reconsideration recourse on 2012 income tax procedure (Speculative Overweight)

CLH announced yesterday that the DIAN (Colombian Tax Authority) ratifies its position about the reconsideration recourse filed by Cemex Colombia, subsidiary of CLH, concerning the settlement of the official income tax for the period 2012, in which, according to the DIAN, Cemex Colombia used certain deductions that were rejected. According to 3Q19 CLH financial results, the additional amount to be paid rises to USD36mn plus USD36mn of fine for a total amount of USD72mn on April 6, 2018, which has a higher value today, according to the interest rate use for the update.

According to the company, they still have two legal actions before being finally guilty, two steps that if were to ratify DIAN's decision, could take a long time (around 8 years in average). It is worth to bear in mind that CLH has two additional procedures with the DIAN for the periods 2009 and 2011. The first one is at the last stage on the State Council, and the later in a very early stage. The total amount of all three procedures rises to USD174mn at the time of CLH receiving the notification, and close to USD240mn according to our numbers.

If any of this procedures rules out against CLH will not affect our TP as we are including in our base case scenario the negative resolution of all three process against CLH for a conservative approach.

Tax administration announced 2019's tax collection accomplished

According to the Colombian tax administration (DIAN), tax collections in 2019 reached COP 157.9 bn, a number 9.3% above 2018's level. This is how tax collection targets for the year were achieved with 100.6% accomplishment. From the referred tax collections number COP52.74 tn (33.4%) corresponded to income tax while COP 37.08 tn (23.5%) were collected through VAT. These figures were achieved thanks to tax collections for COP 9.89 bn obtained during December 2019.

Breakfast with Bancolombia

Sovereign Bonds & FX Market

FX Performance- USD/COP y USD/BRL

USDCOP	USDBRL
3.600	4,40
3.500	4,14
4,20
3.400
	4,00
3.300	3.271
	3,80
3.200
3.100	3,60
3.000	3,40
19-Aug26-Aug2-Sep9-Sep16-Sep23-Sep30-Sep7-Oct14-Oct21-Oct28-Oct	4-Nov11-Nov18-Nov25-Nov2-Dec9-Dec16-Dec23-Dec30-Dec6-Jan13-Jan

Source: Grupo Bancolombia, Bloomberg

7,20% 6,80% 6,40% 6,00% 5,60% 5,20% 4,80% 4,40% 4,00%

Var bp

Fixed Income - TES Yield Curve (%)

	6-ene.-20		13-ene.-20
					6,50%
					6,38%
				6,11%
			5,82%		6,14%	6,27%
				5,92%
		5,33%
			5,64%
	4,96%		5,19%
	4,88%
	4,05%
jul-20	may-22	jul-24	ago-26	abr-28	sep-30	jun-32
15	-8	-14	-18	-19	-24	-23

Source: Grupo Bancolombia, Bloomberg

Commodity Prices by Category (Base 100, 12 months)

		Agricultural	Precious Metals
130		Industrial Metals	Energy
120
110
100
90
80
Jan-19	Apr-19	Jul-19	Oct-19	Jan-20

Source: Grupo Bancolombia, Bloomberg

Commodity Prices by Category (var%)

	Units	13-Jan-20	Daily	YTD
	Reference Index
CRB Index	unit	183,0	-0,6%	-2,1%
		Energy
WTI	US$/bbl	58,1	-1,6%	-5,8%
Brent	US$/bbl	64,3	-1,1%	-6,1%
Coal	US$/tn	72,3	1,9%	6,7%
	Industrial Metals
Copper	US$/lb	285,6	1,5%	0,8%
		Precious Metals
Gold	US$/oz	1548,3	-0,8%	2,0%
Silver	US$/oz	18,0	-0,7%	-0,1%
		Agriculture
Coffee Arabica	cent US$/lb	114,6	-3,7%	-13,3%
Wheat	cent US$/lb	562,3	-0,4%	1,1%
Corn	cent US$/bu	389,5	1,0%	0,3%
Sugar	Usd/lb	14,2	0,6%	4,7%

Source: Grupo Bancolombia, Bloomberg.

Economic, Industry and Market Research

Juan Pablo Espinosa Arango

Chief Economist and Head of Economic, Industry and Market Research

[e-mail]

[phone] ext. 37313

Economic research

Diego Fernando Zamora Díaz Head of Economic Research [e-mail] [phone] ext. 37319

Arturo Yesid González Peña

Quantitative Analyst

[e-mail]

[phone] ext 37385

Santiago Espitia Pinzón

Macroeconomic Analyst

[e-mail]

+ 571 7463988 ext. 37315

Bryan Hurtado Campuzano

International and Regional Analyst

[e-mail]

[phone] ext. 37303

Juan Manuel Pacheco Perez

International and Markets Analyst

[e-mail]

[phone] ext. 37380

Juan Camilo Meneses Cortes

Central Banking and Financial System

Analyst

[e-mail]

[phone] ext. 37316

Karen Stefanny Correa Castaño

Interrn

[e-mail]

[phone] ext. 37310

Industry Research

Jhon Fredy Escobar Posada Head of Agroindustry Research [e-mail] [phone] ext 44649

Nicolás Pineda Bernal

Head of Commerce Research [e-mail] [phone] ext 42985

Juan Sebastián Neira Orozco

Commerce Industry Analyst [e-mail]

Paolo Betancur Montoya

Agroindustry Analyst

[e-mail]

Javier David Villegas

Real Estate and Hotels Analyst [e-mail]

Research Assistant

Alejandro Quiceno Rendón

Research Editor

[e-mail]

[phone]

Equity Research

Jairo Julián Agudelo Restrepo

Head of Equity Research

[e-mail]

[phone]

Diego Alexander Buitrago Aguilar

Energy Analyst

[e-mail]

[phone]

Andrea Atuesta Meza

Financial Sector Analyst

[e-mail]

[phone]

Juliana Aguilar Vargas, CFA

Cement & Infrastructure Analyst

[e-mail]

[phone]

Ricardo Andrés Sandoval Carrera

Oil & Gas & Airlines Analyst

[e-mail]

[phone]

Valentina Martinez Jaramillo

Junior Analyst

[e-mail]

[phone]

Ana María Núñez Buriticá

Intern

[e-mail]

[phone]

Terms of use

This report has been prepared by Analysis Bancolombia a research and analysis department at Grupo Bancolombia. It shall not to be distributed, copied, sold, or altered in any way without the express permission of Grupo Bancolombia, nor be used for any purpose other than to serve as background material which does not constitute an offer, advice, recommendation, or suggestion by Grupo Bancolombia for making investment decisions or conducting any transactions or business. The use of the information provided is solely the responsibility of the recipient.

Before making an investment decision, you should assess multiple factors such as the risks of each instrument, your risk profile, your liquidity needs, among others. This report is only one of many elements that you should consider in making your investment decisions. In order to extend the content of this information, we ask you to contact your business manager. We recommend you not to make any investment decision until fully understanding all factors involved in such decisions. Fixed income and equity securities, interest rates, and other information found here are purely informational and are not an offer or firm demand to perform transactions. Also, according to the applicable regulations, our opinions or recommendations do not constitute a commitment or guarantee of return for the investor.

The information and opinions in this research report constitute a judgment as of the date indicated and are subject to change without notice. The information may therefore not be accurate or current. Future projections, estimates, and forecasts are subject to several risks and uncertainties that prevent us from ensuring that they will prove correct or accurate, or that the information, interpretations, and knowledge on which they are based will be valid. In that sense, actual results may substantially differ from the forward-looking statements contained here. You should be aware of the fact that investments in securities or other financial instruments involve risks. Past results do not guarantee future performance.

The entities that are part of Grupo Bancolombia may have acquired and maintain at the time of preparation, delivery or publication of this report, for their own position or that of their clients, the securities or financial assets to which the reports refers. Grupo Bancolombia has risk policies to avoid a concentration in their own positions and those of their clients, which contributes to avoid conflicts of interest.

As regards to conflicts of interest, we declare that (i) Valores Bancolombia S.A. Comisionista de Bolsa and/or Banca de Inversión Bancolombia S.A. Corporación Financiera have participated in structuring or underwriting/placing equity securities for Bancolombia S.A., (ii) Grupo Bancolombia is the beneficial owner of 10% or more of the shares issued by Valores Simesa S.A., and Proteccion S.A., (iii) Bancolombia is one of the biggest shareholders of Fondo Inmobiliario Colombia - FIC, and (iv) Valores Bancolombia S.A. Comisionista de Bolsa is a wholly owned subsidiary of Bancolombia S.A. Nevertheless, it has been prepared by our Analysis Bancolombia department team based on strict internal policies that require from us objectivity and neutrality, as well as independence from our areas of brokerage and investment banking.

The information contained in this report is not based, does not include nor has been structured based on privileged or confidential information. Any opinions or projections contained herein are solely attributable to the author and have been prepared independently and autonomously in the light of the information available at the time.

The content of this message does not constitute a professional recommendation to make investments according to the terms of article 2.39.1.1.2 of the Decree 2555 of 2010 or the regulations that modify, replace or complement it.

Rating System

The investment recommendation on the issuers under coverage by Analysis Bancolombia is governed by the rating system presented below, subject to the following criteria:

The upside potential is the percentage difference between the target price of securities issued by a particular issuer and their market price. The target price is not a forecast of the price of a stock, but a fundamental independent valuation made by Analysis Bancolombia, which seeks to reflect the fair price the market should pay for the shares on a given date.

Based on an analysis of the relative upside potential amongst the securities of companies under coverage and the COLCAP index, the ratings of the assets are determined as follows:

Overweight: when the upside potential of a stock exceeds by 5% or more the return potential of the COLCAP index.

Market Weight: when the upside potential of a stock does not differ by more than 5% from the return potential of the COLCAP index.

Underweight: when the upside potential of a stock is 5% or more below the return potential of the COLCAP index.

Under Review: the company's coverage is under review and therefore there's no rating or target price.

Additionally, at the discretion of the analyst, the speculative qualification that complements the recommendation will continue to be used, taking into account the risks seen in the performance of the asset, its future development and the volatility the movement of the stock may show.

The fundamental potential of the index is determined based on the methodology established by the BVC for the calculation of the COLCAP index, considering the target prices published by Analysis Bancolombia. This will be made with the Colcap basket on the dates of calculation May and November of every year. For the companies part of the index but not covered, the consensus of market analysts will be used.

Currently, Analysis Bancolombia has 19 companies under coverage, distributed as follows:

	Overweight	Market Weight	Underweight	Under Review
Number of issuers with ratings of:	12	2	4	1
Percentage of issuers with ratings of:	63.2%	10.5%	21.1%	5.3%