J.P. Morgan LatAm FTM 21 May 26 LatAm Petrochemicals; Brazilian Telcos; UQ: Utilities Quant; Brazil Pharma and Drug Retail; Parque Arauco and More

Research evidence excerpt

J.P. Morgan LatAm FTM 21 May 26 LatAm Petrochemicals; Brazilian Telcos; UQ: Utilities Quant; Brazil Pharma and Drug Retail; Parque Arauco and More

Latin America Equity Research

LatAm First to Market 21 May 2026

Top Stories

| LatAm Petrochemicals (Milene Clifford Carvalho)

Riding the Tide: Updating Petchems Estimates and Upgrading Alpek to Overweight (Top Pick)

We upgrade Alpek to Overweight and rank it our Top Pick within PetChems as we update estimates for the segment to

reflect a more supportive post-conflict setup, where tighter effective supply and higher logistics costs are rebuilding

spreads. We see Alpek as the clear beneficiary of the near-term inflection as higher ocean freight costs are widening the

import-parity and supporting integrated PET margin expansion from 2Q26 onwards. Additionally, firm demand, effective

paraxylene pass-through (including in contracted volumes), and seasonal support into the World Cup period, drives our upward

revision to EBITDA expectations (+32% JPM). As a result, we see ALPEKA trading at 4.2x ‘26 EV/EBITDA (vs 5.2x 10y

average), with upside potential of 53%. For Orbia, we also see fundamentals improving under our revised CMA assumptions,

led by Polymer Solutions’ ethane advantage and broad-based resilience across the portfolio, but we remain Neutral as the

investment case is still anchored on execution and deleveraging. We see Orbia trading at 5.9x ‘26 EV/EBITDA (vs 5.3x 10y

average), with upside potential of 19%.

Brazilian Telcos (Marcelo Santos, CFA)

Reducing PTs on Higher Cost of Capital, Softer Margin Outlook; Continue to Favor Tim vs Vivo

We update our estimates on Vivo and Tim following 1Q26 results, making only limited changes, with the main one being a more