Hites

Company Update ‐ Equity Research
HITES
HITES CI Retail April 17th, 2012
A fairly valued small player in the retail sector
Summary and Investment Conclusion
Philip Griffiths
Research AnalystPhilip.Griffiths@mbi.cl
Key Ratios and Statistics
Current price $ 372,50
Target price $ 400,00
Dividend Yield % 2,5%
Upside % 7,4%
Total return % 10,0%
Shares Outstanding (Mn) 377,124
Market CapUS$ Mn 289,6
Philip Griffiths (Philip.griffiths@mbi.cl)
Santiago, Chile
Considering that the company focuses on the same business segment as La
In the recently reported results for 2011, TheCompany had total earnings of $
12,293 million and a net margin of 5.4%. At the operating level the company had
a $ 23,497 million EBITDA which is 23% higher than the one it had during 2010.
The growthin operating income was driven by increasing retail sales through a
22% expansion in store surface, and a 13% SSS growth, while marginally
increasing costs. On the Financial business the companyhad a 17% increase in
loans outstanding, while increasing revenues by 24% and increasing gross
margins from 56% to 63%.
After releasing its results for the year 2011, we are resuming coverage ofHITES
with a HOLD rating and a 12 month target price of $ 400. Our target price
estimate has a 7.4% upside potential, and a 10% total return if we consider a
30% dividend distribution policy, in linewith the company´s historical payout
ratio. This expected return is slightly above the 5.1% increase we estimate for
the IPSA index, which makes it a relatively attractive investment in terms ofreturn, although the operational risk and illiquidity of the stock aren’t attractive
enough to justify a BUY rating on a risk return basis.
CORREDORES DE BOLSA
Net debt US$ Mn 98,0
52-wk range
AvgDaily Vol
Financial Data
2011 2012e 2013e
EBITDA ($ Mn) 23.497 24.974 23.780
Net profit (US$ Mn) 12.293 13.125 11.770
EPS (CLP$) 32,66 34,87 31,27
P/E 11,81 11,06 12,34
Business Summary...