Cencosud Shopping SA (CENCOMALLS.SN) fair value

ACCE thesis

Cencosud Shopping owns and operates shopping centers across Chile, Peru and Colombia, with its income coming from leases to anchor department stores, supermarkets and smaller tenants under long-dated contracts. The competitive edge is the scale and quality of its mall portfolio in Chile, where it sits among the country's largest mall operators and where high-traffic centers in established urban catchments are hard to replicate. Revenue grew 9.3% and the operating margin of 90.2% shows how little cost sits between rent collected and profit, so growth depends mostly on occupancy, rent escalators and new space rather than on cost cuts. The stock trades at a trailing P/E of 10.7 with a 11.8% ROE, a combination that looks reasonable for a real estate business with this margin profile, though a forward multiple is not available in our data. The score of 62/100 and absence from any index suggest the name is under-followed, which makes it worth a closer look at the lease roll schedule, Chilean consumer demand and the Peruvian and Colombian contribution before drawing conclusions.