Cosan, Rumo, Raizen, Compass To be, or not to be; life after Compass IPO

Research evidence excerpt

Cosan, Rumo, Raizen, Compass To be, or not to be; life after Compass IPO

26 May 2026

Equities

Cosan, Rumo, Raizen, Compass Fuel Marketing, Renewables,

Infrastructure, Agri

To be, or not to be; life after Compass IPO Brazil

◆ Cosan: purpose again under scrutiny as an indebted holdco

◆ Compass: the better, undervalued child, now listed LilyannaAnalyst, LatAmYang, CFAOil & Gas, Utilities, Petrochems

HSBC Securities (USA) Inc.

◆ Downgrade Cosan to Reduce from Hold, and Raizen to Hold lilyanna.yang@us.hsbc.com

from Buy; retain Buy on Rumo; new TPs and estimates +1 212 525 0990

Arthur Gennari*

Analyst, LatAm Oil & Gas, Utilities, Petrochems

Cosan – preparing for retirement: We downgrade Cosan to Reduce from Hold, on Banco HSBC S.A.

an implied 9% downside to our new BRL4.00/sh or USD3.20/ADR TP. This arthur.gennari@hsbc.com +55 11 2801 2616

downgrade is triggered by interconnected factors: higher financial expenses and

asset sales at low prices / total return swaps at high funding cost (at Compass and/or

* Employed by a non-US affiliate of HSBC Securities (USA) Inc, and is

Rumo). The October 2025 ownership restructuring with a BRL10bn injection (at not registered/ qualified pursuant to FINRA regulations

BRL5/sh; see link) came out to be too-little-too-late to lift up the value of the opcos

amid an environment of high interest rates for longer (we now expect Brazil’s CDI

rates to reach 12% only in 2Q27. We adjust estimates and lift the holdco discount to

35% (vs. 20% we use for Ultrapar reflecting company-specific issues, the IPO of

Compass, and increased risk aversion to complex stories).

Compass (PASS3 BZ, not rated, BRL27.01) – the BRL2.8bn IPO: Cosan reduced

its stake in Compass to 77% from 88% this month at BRL28/sh, or 16% below the