Mexican Real Estate Actinver s Equity Research

Transcription

1 Mexican Real Estate Actinver s Equity Research Beyond Interest Rates, The Factors Behind FIBRA s Underperformance In 2015 May 28, 2015 Pablo E. Duarte de León Real Estate Analyst +52 (55) x4334 pduarte@actinver.com.mx

2 FIBRAs Main Investment Highlights I Fundamentals of industrial, office (northern and Bajio markets), commercial and hotel sectors remain intact, with a strong growth outlook. All FIBRAs and RE C-Corps have been able to increase rents above inflation (positive lease spreads). II Despite the expected increase in interest rates, FIBRAs profitability against the benchmark 10YR Bond (MBONO 10) will remain 39% higher. The negative impact on debt service would be limited as FIBRAs use derivatives (caps and swaps) to cover their floating rate debt. III The projected investment properties value is not properly reflected in the FIBRAs market values. The growth coming from announced investments offers an attractive long-term growth potential (once stabilized) over current trading prices. IV Attractive asset class due to its defensive nature (long term leasing contracts) and dollarized income. V Differently from the rest of the stocks in the local market, FIBRAs are not subject to the 10% tax retention on capital gains VI FIBRAs offer quarterly dividend distributions equivalent to 95% of the net fiscal result. These distributions are not subject to the 10% tax on dividends VII FIBRAs are a highly defensive investment vehicle. They offer great diversification benefits due to their hybrid debt-equity nature. 2

3 FIBRAs Historical Returns In 2015 the FIBRAs asset class has underperformed the IPC by 9.4 percentage points, with a -5.6% YTD return. Period FUNO FINN TERRA FSHOP FIBRAMQ FIBRAPL FIHO DANHOS FMTY YTD % -8.4% -2.8% -12.3% -12.8% -2.2% -15.0% 4.5% 4.9% LTM -2.1% -11.6% 12.4% 1.2% -11.5% N.A % 30.9% N.A % N.A. N.A. N.A. 0.5% N.A. 7.7% N.A. N.A % -5.7% 31.4% 18.3% -2.0% N.A. 9.9% 44.7% N.A. Since IPO 100.1% -22.1% 7.2% -2.2% -11.8% -1.2% 5.5% 46.0% 6.7% IPO Date 18-Mar Mar Mar Jul Dec Jun Nov Oct Dec-14 3

4 Base 100 (December 31, 2013) Diversified And Retail RE Performance Price Performance Of Diversified And Retail RE FIBRAs / C-Corps (MX$ Rents) Equity Offering Debt Offering DANHOS: 51.2% FBMEX: 9.5% IPC: 4.9% FSHOP: 3.8% 95.0 FUNO: -6.7% Dec Mar Apr Jun Aug Oct Dec Feb Apr-15 FSHOP13 FUNO11 DANHOS13 IPC FBMEX Source: Bloomberg, Actinver. 4

5 Base 100 (December 31, 2013) Industrial And Office RE Performance Price Performance Of Industrial And Office RE FIBRAs / C-Corps (USD Rents) Equity Offering Debt Offering TERRA: 27.8% VESTA: 21.7% FBMEX: 9.5% FMTY: 6.7% IPC: 4.9% FIBRAPL: -1.2% FIBRAMQ: -14.5% Dec Mar Apr Jun Aug Oct Dec Feb Apr-15 VESTA* TERRA13 FIBRAMQ FIBRAPL FMTY14 IPC FBMEX Source: Bloomberg, Actinver. 5

6 Base 100 (December 31, 2013) Lodging RE Performance Price Performance Of Lodging RE FIBRAs / C-Corps (MX$ Daily Rates) Equity Offering Debt Offering FBMEX: 9.5% IPC: 4.9% HCITY: 0.0% 95.0 FIHO: -6.6% Dec Mar Apr Jun Aug Oct Dec Feb Apr-15 FINN: -13.7% FIHO12 FINN13 HCITY* IPC FBMEX Source: Bloomberg, Actinver. 6

7 Base 100 (December 31, 2013) Relative Performance Of FIBRAs Relative Performance Of Mexican FIBRAs May Jul Aug Sep Nov Dec Jan Mar Apr May-15 IYR MBONO 10 FBMEX IPC FUNO11 Source: Bloomberg, Actinver. IYR Index: ishares U.S. RE ETF. Its objective seeks investment results that correspond to the performance of the Dow Jones U.S. RE Index. 7

8 FIBRAs Key Value Drivers Remain Solid Value in commercial RE is generated through 1) occupancy gains, and 2) rent increases. Furthermore, FIBRAs create additional value through execution capacity on investments (cap rate arbitrage). Diversified Office Occupancy 1Q15 Lease Spread Occupancy 1Q15 Lease Spread FUNO 94.9% +4.9% FMTY 96.1% DANHOS 92.1% +6.8% FUNO 92.1% +6.0% Retail Occupancy 1Q15 Lease Spread FSHOP 92.0% +5.6% FUNO 94.7% +5.4% Industrial Lodging Occupancy 1Q15 Lease Spread Occupancy 1Q15 SS RevPAR TERRA 94.0% +5.2% HCITY 63.5% +12.7% FIBRAPL 96.6% +8.2% FINN 61.5% +12.5% FUNO 95.7% +4.4% FIHO 60.0% +5.8% Local FIBRAs are being able to capture organic growth, which is not being translated into capital appreciation Additionally, cap rate arbitrage is being generated and land tends to appreciate (upside to FIBRAs value) Value has not being destroyed. Thus, FIBRAs underperformance is not being driven by fundamentals. 8

9 Sound Long-Term Growth Opportunities For FIBRAs There is enough room for FIBRAs to sustain their long-term (LT) growth plans in Mexico Shopping Centers (8% FIBRA s ownership of commercial space; 71% of premium SCs) According to INEGI, there are 4,174 shopping centers in Mexico, with an average of 36 tenants each. This means that most of the SCs in the country are relatively small. From these, FIBRAs own just 7.5% as of 1Q2015. According to a study we have performed, the premium quality SCs (similar to the ones currently owned by FUNO, FSHOP, FIBRAMQ and DANHOS) total 445, from which FIBRAs have a 70.8% share. Even considering larger malls, there are still high growth opportunities for FIBRAs. Furthermore, development activity remains strong. Nationwide there are 38 new SCs (1.38 MM sqm) under construction, according to CBRE. Industrial Facilities (22% FIBRA s ownership of industrial space; 42% of Class A/A+ facilities) Regarding industrial RE, Mexico s market is comprised by properties with a total 648 million square feet of GLA (according to MexicoNow), from which million sqf are institutional Class-A facilities (infiltration of 53%). FUNO, FIBRAMQ, TERRA, FIBRAPL and VESTA own 22% of the total and 42% of the Class-A inventory. It is true that large institutional portfolios are now scarce (after the high consolidation process from FIBRAs experienced over the last years). However, there is plenty of room for acquisitions of premium facilities owned by regional developers. A higher infiltration and new developments under construction (+2.2 MM sqm of Class-A; +7% inventory) in the country will offer higher room for FIBRAs to play. Office Buildings (13% FIBRA s ownership of Class A/A+ space) The local RE office segment is highly fragmented as well. It is comprised by a total 5,564 thousand sqm of GLA of Class A/A+ properties, just in the markets of Mexico City (79%), Guadalajara (6%) and Monterrey (15%). FIBRAs own 12.6% of that. There are sound acquisition opportunities from the sector s consolidation. Not to mention that there are Class-B office buildings suitable for FMTY s investment strategy in other regional cities as well. 9

10 U.S. REITs Index (IYR) U.S. 10-YR T. Bond Yield (%) Interest Rates The expected increase in interest rates explains just partially FIBRAs underperformance. The expectation of interest rates increases was incorporated into FIBRAs CBFI prices during Sept and April 2015, following closely the performance of U.S. REITs. The negative correlation of high-growth FIBRAs vs. interest rates should be lower as compared to other more mature U.S. REITs. The gradual increase in interest rates will come along with an improvement in the overall economic activity, which will translate into higher organic growth for FIBRAs. Mexican FIBRAs leverage levels are well below the local regulatory limits of 50% debt / assets ratio and U.S. standards of ~80%. Increase in interest rates should have a limited impact on FIBRAs. Most of FIBRAs debt is at fixed rates (76% FUNO s case). FIBRAs with variable rate debt use caps and swaps as hedging instruments. U.S. REITs Performance Vs. 10-YR U.S. T. Bond FIBRAs' Underperformance Not Fully-Explained By Interest Rates U.S. REITs (IYR) Mx FIBRAs (FBMEX) % Jan-14 Mar-14 May-14 Jun-14 Aug-14 Oct-14 Dec-14 Feb-15 Apr Jul-14 Aug-14 Sep-14 Oct-14 Nov-14 Dec-14 Jan-15 Feb-15 Mar-15 Apr-15 May-15 Source: Bloomberg, Actinver. Source: Bloomberg, Actinver. 10

11 Factors Behind FIBRAs Underperformance FUNO s specific factors just partially explain its price underperformance. FUNO's spread vs. IYR widened since November U.S. REITs Index (IYR) FUNO Follow-On ? % 90 Interest Rates Interest Rates 70 May-13 Jul-13 Sep-13 Nov-13 Jan-14 Mar-14 May-14 Jul-14 Sep-14 Nov-14 Jan-15 Mar-15 May-15 Source: Bloomberg, Actinver. 11

12 Peso Depreciation Vs. U.S. Dollar Despite the operating benefits that a stronger US dollar vs. the peso brings to the FIBRAs (dollarized income and expenses incurred in pesos), in relative terms it has had a clear negative impact on their CBFI prices. FIBRAs with dividends determined in Mexican pesos, particularly FUNO, FSHOP, FINN and FIHO, result less attractive for foreign investors at current FX. Dividends received in pesos are ~16% lower in USD terms. FIBRAs' performance largely explained by the peso depreciation vs. the US dollar Nov-14 Nov-14 Dec-14 Dec-14 Jan-15 Jan-15 Feb-15 Feb-15 Mar-15 Mar-15 Apr-15 Apr-15 May-15 May-15 Source: Bloomberg, Actinver. U.S. REITs Index (IYR) FUNO11 MXN/USD 12

13 Fly-To-Quality; To More Liquid Names There has been a fly-to-quality to more liquid assets in the local stock market in Since February 2015 the spread between the IRT Mid Cap Index and the IRT Large Cap Index widened significantly. Most of the FIBRAs are low- and medium-cap assets. FIBRAs performance following that of less liquid stocks FUNO11 IRT-Large Caps IRT-Mid Caps Oct-14 Nov-14 Nov-14 Dec-14 Dec-14 Jan-15 Jan-15 Feb-15 Feb-15 Mar-15 Mar-15 Apr-15 Apr-15 May-15 Source: Bloomberg, Actinver. 13

14 What To Expect Going-Forward? FIBRAs prices have reached bottom levels, particularly now that market-driven factors have stabilized, in our view. We expect the following drivers to boost FIBRAs price performance in the following months: 1. The gradual appreciation of the Mexican peso against the US-dollar. 2. The consolidation of the FIBRAs announced investments (particularly FUNO s case). 3. The continuous rental rates increase above inflation (positive lease spreads). 4. Sustained solid occupancy levels. 5. Use of available resources in accretive investments (FINN s and FSHOP s cases). 14

15 Significant FIBRAs Price Corrections Offer Opportunities FUNO is trading at 0.81x its NAV of MX$48.0 /CBFI. The market is valuating at zero all FUNO s development projects. FINN s current NAV (excluding new acquisitions) is MX$17.1 /CBFI. Current price is 15% below this value. FINN: Net Asset Value (NAV) Current NAV FUNO's Current Net Asset Value (NAV) - (MX$ MM) FINN: Net Asset Value (NAV) Current NAV FIBRA Inn's Current Net Asset Value (NAV) - (MX$ MM) Properties Capitalized Income FIBRA FWD Cap Rate (%) PV Annualized NOI (MX$ MM) Current Value (MX$ MM) Value /CBFI (MX$) Properties Capitalized Income FIBRA Cap Rate (%) Current Annualized NOI (MX$ MM) Current Value (MX$ MM) Value /CBFI (MX$) Stabilized Portfolio 6.0% $ 7,737 $ 128,942 $ Indiana (2H2015E) 6.0% $ 230 $ 3,838 $ 1.28 Oregon (2Q2015) 6.0% $ 108 $ 1,804 $ 0.60 Kansas (2Q2015) 6.0% $ 700 $ 11,664 $ 3.90 Delaware (2018) 6.0% $ 182 $ 3,030 $ 1.01 La Viga (2016) 6.0% $ 144 $ 2,397 $ 0.80 Diana (2017) 6.0% $ 86 $ 1,428 $ 0.48 G-30 Developments (2015) 6.0% $ 703 $ 11,710 $ 3.92 R15-Development (Exc. GICSA) ( ) 6.0% $ 510 $ 8,502 $ 2.84 Gross Real Estate (RE) Value $ 183,123 $ Cash and Cash Equivalents $ 863 $ 863 $ 0.29 Other Tangible Assets $ 32,497 $ 32,497 $ Other Balance Sheet Assets $ 33,360 $ 33,360 $ Gross Market Value of Assets $ 216,484 $ Balance Sheet Liabilities Value Value /CBFI Short-Term Debt $ 2,225 $ 2,225 $ 0.74 Long-Term Debt $ 69,923 $ 69,923 $ Total Debt $ - $ 72,148 $ Other Liabilities $ 848 $ 848 $ 0.28 Net Asset Value (NAV) Value Value /CBFI Net Market Value of Assets $ 143,488 $ 48.0 Current Market Capitalization $ 116,563 $ 39.0 Premium / Discount to NAV -18.8% P/NAV 0.81x Current CBFIs Outstanding (MM) 2,989 Hotel 1 9.3% $ 23 $ 244 $ 0.56 Hotel 6 6.1% $ 13 $ 209 $ 0.48 Hotel 7 6.6% $ 13 $ 204 $ 0.47 Hotel % $ 19 $ 220 $ 0.50 Real Estate (RE) Operations 7.9% $ 482 $ 6,071 $ Balance Sheet Assets P/BV Book Value Value Value /CBFI Construction in Progress (3 Developments + Rooms) 1.25x $ 316 $ 395 $ 0.90 Land Held for Future Development 1.00x $ 11 $ 11 $ 0.02 Total Development and Land $ 327 $ 406 $ 0.93 Gross Real Estate (RE) Value $ 6,477 $ Cash and Cash Equivalents $ 791 $ 791 $ 1.81 Other Tangible Assets $ 406 $ 406 $ 0.93 Other Balance Sheet Assets $ 1,197 $ 1,197 $ 2.74 Gross Market Value of Assets $ 7,674 $ Balance Sheet Liabilities Value Value /CBFI Long-Term Debt $ 67 $ 67 $ 0.15 Total Debt $ - $ 67 $ 0.15 Other Liabilities $ 145 $ 145 $ 0.33 Net Asset Value (NAV) Value Value /CBFI Net Market Value of Assets $ 7,462 $ 17.1 Current Market Capitalization $ 6,315 $ 14.5 Premium / Discount to NAV -15.4% P/NAV 0.85x Current CBFIs Outstanding (MM) 437 Note: We are not incorporating Buffalo s development project in FUNO s NAV. 15

16 Significant FIBRAs Price Corrections Offer Opportunities FSHOP s current NAV (excluding new acquisitions) is MX$18.8 /CBFI. Current price is 9.5% below this value. Same as with FINN, not valuing the use of FSHOP s fire-power is a worst-case (irrational) scenario. FSHOP: Net Asset Value (NAV) Current NAV FIBRA Shop's Current Net Asset Value (NAV) - (MX$ MM) Properties Capitalized Income FIBRA Cap Rate (%) Current Annualized NOI (MX$ MM) Current Value (MX$ MM) Value /CBFI (MX$) Plaza Cibeles 7.0% $ 90 $ 1,244 $ 2.61 La Luciernaga $ 0 $ 17.6 $ Puerto Paraiso $ 0 $ 84.8 $ 1, City Center Esmeralda 9.0% $ 40 $ 415 $ 0.87 Plaza Cedros 8.0% $ 33 $ 377 $ 0.79 Real Estate (RE) Operations 7.0% $ 675 $ 8,916 $ Balance Sheet Assets P/BV Book Value Value Value /CBFI Construction in Progress (Cibeles Expansion) 1.25x $ 327 $ 408 $ 0.86 Total Development and Land $ 327 $ 408 $ 0.86 Gross Real Estate (RE) Value $ 9,324 $ Cash and Cash Equivalents $ 1,831 $ 1,831 $ 3.84 Other Tangible Assets $ 287 $ 287 $ 0.60 Other Balance Sheet Assets $ 2,118 $ 2,118 $ 4.44 Gross Market Value of Assets $ 11,442 $ Balance Sheet Liabilities Value Value /CBFI Short-Term Debt $ 2,184 $ 2,184 $ 4.58 Total Debt $ - $ 2,184 $ 4.58 Other Liabilities $ 266 $ 266 $ 0.56 Net Asset Value (NAV) Value Value /CBFI Net Market Value of Assets $ 8,992 $ 18.8 Current Market Capitalization $ 8,141 $ 17.1 Premium / Discount to NAV -9.5% P/NAV 0.91x Current CBFIs Outstanding (MM)

17 FIBRAs Expected Dividends 2015 FIBRAs with highest expected growth in dividend per CBFI in 2016 include: i) FSHOP (yield of 8.1%), ii) FMTY (yield of 7.4%) iii) FINN (yield of 8.1%), and iv) FUNO (yield of 6.0%). FIBRAs' Expected Dividends % 8.1% 7.4% 8.1% 7.0% 6.0% 5.0% 6.0% 5.2% 6.3% 4.9% 6.3% 6.4% 5.1% 6.3% 6.4% 4.3% 5.7% 4.0% 3.0% 2.0% 1.0% 0.0% Source: Actinver, Consensus. 17

18 FIBRAs Expected Total Return 2015 FIBRA Dividend Forecasts (MX$) Capital Appreciation Total Return Dividend Per Current CBFI Dividend Current CBFI Capital Dividend FIBRA Fair Value FIBRA CBFI Price Yield Price Appreciation Yield Capital Appreciation Total Return FUNO $ 2.01 $ % FUNO $ $ % FUNO* 5.2% 30.7% 35.9% FSHOP $ 1.08 $ % FSHOP $ $ % FSHOP 6.3% 19.2% 25.5% DANHOS $ 1.87 $ % DANHOS $ $ % DANHOS 4.9% 6.7% 11.6% TERRA $ 1.90 $ % TERRA $ $ % TERRA 6.3% 16.6% 22.9% FIBRAMQ $ 1.40 $ % FIBRAMQ $ $ % FIBRAMQ 6.4% 18.0% 24.3% FIBRAPL $ 1.37 $ % FIBRAPL $ $ % FIBRAPL 5.1% 18.1% 23.2% FMTY $ 0.78 $ % FMTY $ $ % FMTY 6.3% 9.4% 15.7% FINN $ 0.92 $ % FINN $ $ % FINN 6.4% 31.1% 37.5% FIHO $ 0.83 $ % FIHO $ $ % FIHO 4.3% 12.7% 17.0% FIBRA's Expected Total Return % 35.0% 30.0% 25.0% 20.0% 15.0% 10.0% 5.0% 0.0% 37.5% 35.9% 5.2% 6.4% 25.5% 24.3% 22.9% 23.2% 6.3% 6.4% 6.3% 5.1% 15.7% 30.7% 31.1% 11.6% 6.3% 17.0% 4.3% 19.2% 4.9% 16.6% 18.0% 18.1% 12.7% 6.7% 9.4% FUNO FSHOP DANHOS TERRA FIBRAMQ FIBRAPL FMTY FINN FIHO Source: Actinver, Consensus. 18

19 FIBRAs: Returns & Expected Yields FIBRAs: Returns & Expected Yields FIBRAS (UDI-Based Rents) Last Price Market Cap FFO Yield (%) NOI Cap Rate Adjusted Cap Rate Dividend Yield (%) Spread vs. Bench (Local$) (Local$ MM) 2015E 2015E 2015E 2015E 2016E 2015E 2016E FIBRA Uno $ $ 116, % 6.4% 5.7% 5.2% 6.0% 295 bps 365 bps FIBRA Shop $ $ 8, % 5.8% 5.4% 6.3% 8.1% 410 bps 575 bps FIBRA Danhos $ $ 49, % 4.4% 3.6% 4.9% 5.4% 273 bps 303 bps Average $ 58, % 5.5% 4.9% 5.5% 6.5% 326 bps 414 bps Benchmark (UDIBONO) 2.2% 2.4% FIBRAS (U.S. Dollars) FIBRA Macquarie $ $ 17, % 8.0% 7.2% 6.4% 6.7% 508 bps 557 bps Terrafina $ $ 18, % 7.2% 6.4% 6.3% 7.1% 506 bps 600 bps FIBRA Prologis $ $ 16, % 7.9% 7.0% 5.1% 6.1% 383 bps 500 bps FIBRA MTY $ $ 2, % 7.7% 6.6% 6.3% 7.4% 503 bps 630 bps Average $ 13, % 7.7% 6.8% 6.0% 6.8% 466 bps 552 bps Benchmark (10YR TB) 1.3% 1.1% FIBRAS (Mx Pesos) FIBRA Inn $ $ 6, % 7.2% 6.1% 6.4% 8.1% 260 bps 350 bps FIBRA Hotel $ $ 9, % 6.0% 4.7% 4.3% 6.2% 45 bps 160 bps Average $ 8, % 6.6% 5.4% 5.3% 7.1% 153 bps 255 bps Benchmark (TIIE) 3.8% 4.6% Source: Market Consensus, Actinver. 19

20 Disclaimer Guide for recommendations on investment in the companies under coverage included or not, in the Mexican Stock Exchange main Price Index (IPC) StrongBuywith an extraordinary perspective. According to the analyst, in the next twelve months, the valuations of stock and/or prospects for the sector are EXTREMELY FAVORABLE Buy. According to the analyst, in the next twelve months, the stock s valuation and / or prospects for the sector are VERY FAVORABLE Neutral. According to the analyst, in the next twelve months, the valuation of stock and / or sector ARE NEUTRAL OR FAVORABLE but with a similar perspective to the IPC Belowmarket. According to the analyst, in the next twelve months, the valuation of stock and / or sector outlook ARE NOT POSITIVE Sell. According to the analyst, in the next twelve months, the valuation of stock and / or sector outlook ARE NEGATIVE, or likely to worsen In reviewwith positive outlook In review with negative or unfavorable perspective ImportantStatements. a) Of theanalysts: The analysts in charge of producing the Analysis Reports: Jaime Ascencio Aguirre; Mauricio Arellano Sampson; Enrique Octavio Camargo Delgado; Ismael Capistrán Bolio; José Antonio Cebeira González, Pablo Enrique Duarte de León; Araceli Espinosa Elguea; Roberto Galván González; Ana Cecilia González Rodríguez; Carlos Hermosillo Bernal; Santiago Hernández Morales; Martín Roberto Lara Poo; Ramón Ortiz Reyes; Pablo Abraham Peregrina; Juan Enrique Ponce Luiña; Federico Robinson Bours Carrillo; Gustavo Adolfo Terán Durazo; Jesús Viveros Hernández, declare : 1. "All points of view about the issuers under coverage correspond exclusively to the responsible analyst and authentically reflect his vision. All recommendations made by analysts are prepared independently of any institution, including the institution where the services are provided or companies belonging to the same financial or business group. The compensation scheme is not based or related, directly or indirectly, with any specific recommendation and the remunerationis only received from the entity which the analysts provide their services. 2. "None of the analysts with coverage of the issuers mentioned in this report holds any office, position or commission at issuers underhis coverage, or any of the people who are part of the Business Group or consortium to which they belong. They have neither held any position during the twelve months prior to the preparation of this report. " 3. "Recommendations on issuers, made by the analyst who covers them, are based on public information and there is no guarantee of their assertiveness regarding the performance that is actually observed in the values object of the recommendation" 4. "Analysts maintain investments subject to their analysis reports on the following issuers: AC, ALFA, ALPEK, ALSEA, AMX,AZTECA, CEMEX, CHDRAUI, FEMSA, FIBRAMQ, FINDEP, FUNO, GENTERA, GFREGIO, GRUMA, ICA, IENOVA, KOF, LAB, LIVEPOL, MEXCHEM, OHLMEX,POCHTEC, TLEVISA,SORIANA, SPORTS, VESTA, WALMEX. 20

21 Disclaimer b) On Actinver Casa de Bolsa, S.A. de C.V. Grupo Financiero Actinver 1. Actinver Casa de Bolsa, S.A. de C.V. GrupoFinanciero Actinver, under any circumstance shall ensure the sense of the recommendations contained in the reports of analysis to ensure future business relationship. 2. All Actinver Casa de Bolsa, SA de C.V. GrupoFinanciero Actinver business units can explore and do business with any company mentioned in documents of analysis. All compensation for services given in the past or in the future, received by Actinver Casa de Bolsa, SA de C.V. GrupoFinanciero Actinver by any company mentioned in this report has not had and will not have any effect on the compensation paid to the analysts. However, just like any other employee of Actinver Group and its subsidiaries, the compensation being enjoyed by our analysts will be affected by the profitability gained by Actinver Group and its subsidiaries. 3. At the end of each of the previous three months, Actinver Casa de Bolsa, SA de C.V. Actinver Financial Group, has not held any investments directly or indirectly in securities or financial derivatives, whose underlying are Securities subject of the analysis reports, representing one percent or more of its portfolio of securities, investment portfolio, outstanding of the Securities or the underlying value of the question, except for the following: * AEROMEX, BOLSA A, FINN 13, FSHOP 13, SMARTRC Certain directors and officers of Actinver Casa de Bolsa, SA de C.V. GrupoFinanciero Actinver occupy a similar position at the following issuers: AEROMEX, MASECA, AZTECA, ALSEA, FINN, MAXCOM, SPORTS, FSHOP and FUNO. This report will be distributed to all persons who meet the profile to acquire the type of values that is recommended in its content. 21