2025-06-13-花旗集团-希德罗维亚斯（HBSA3）_弗勒里（FLRY3）_JBS（JBSS32）_拉丁美洲要点_12页_188kb

Point for Latin America:

• JBS (JBSS32.SA): Updated model with new share count ratio, increased target price from R$55/shr to R$111/shr, estimates unchanged.
• Fleury (FLRY3.SA): Positive investor meeting; management confident on healthcare industry recovery, reiterating long-term strategy; working on productivity initiatives (AI), focusing on shareholder returns despite a negative calendar effect in 2Q25.
• Hidrovias (HBSA3.SA): Model updated with higher tariff growth expectations; volumes expected to provide better fixed-cost dilution; improved hydrology may boost 4Q performance; company has a better balance sheet but unclear future strategy; target price increased from R$3 to R$3.60/shr; Neutral/High-Risk rating maintained.

Industry:

• Brazil Financials: Capital markets activity in May was flat month-on-month but down 42% year-on-year; debentures dominated issuance; FIIs origination was weak due to higher interest rates.
• Latin America Financials & FinTech: Banco do Brasil is trading above its long-term valuation minimums, with potential for downside if earnings decline; explored sensitivity under different net income scenarios.
• Latin America Beverages: Argentina inflation decreased sequentially (1.5% MoM), with further deceleration expected; consumer confidence improving; Ambev, Arcor, and KOF are key players in the region; KOF is the top pick.

Strategy & Economics:

• Mexico Economics: Inflation remains high, above 4.0%, with core inflation persistent despite slowing services activity; weak economic growth expected for 2Q25; monetary policy unlikely to ease significantly, with end-2025 policy rate around 7.75%.
• Latin America Economics Week Ahead: Focuses on upcoming economic indicators; activity is expected to be relatively stable, with possible slight deterioration.

Global:

• Emerging Markets Strategy: Recommends a short USD position, citing potential USD weakening; favors currencies like KRW and MYR; advises overweighting Indonesia and India bonds.
• Oil Monitor: Oil prices expected to fall by $60-65/bbl by end-2025 due to surplus; recommends hedging via producers.
• Fund Flow Insights: Net outflow of $10 billion from equity funds; strong inflow into bond funds; US funds led equity withdrawals.
• Global Flights Tracker: Global flights rose slightly YTD, with the US and China showing mixed trends.
• ESG & SRI: UK government's Spending Review emphasizes sustainable investment, with potential for public infrastructure beneficiaries.
• Key Rating Changes: Highlighted changes, including Banco PAN target price update and JBS rating increase.