Financials & FinTech research, Galliano’s Financials Research

Victor Galliano

Victor Galliano is an experienced equity banks analyst, having covered Latin America banks and non-bank financials for over 12 years, as well as more recently covering the Italian banks. He has worked in sell side equity research for 30 years in a career spanning Barclays, HSBC, BBVA LatInvest, Barings and NatWest.
Galliano's Financials Research provides fundamental research in Emerging Markets financials, including FinTech, as well as financials in select Developed Markets.
The investment style applied is generally value oriented, although Growth At Reasonable Price (GARP) strategies can also be used where appropriate. Our investment research approach aim is often contrarian, looking to capitalise on overly sceptical or optimistic consensus views. In terms of valuation techniques, the focus is on PBV ratio to ROE, PE multiples and dividend yield, as well as the application of PEG ratios and, where appropriate, Sum of the Parts (SOTP) valuations.

Financials & FinTech research

Banking on Retail: A Primer on The Credit Operations of Leading LatAm Retailers

Financials & FinTech, EM & Developed Markets

Galliano’s Financials Research

Galliano's Financials Research provides fundamental research in Emerging Markets financials, including FinTech, as well as financials in select Developed Markets.

The investment style applied is generally value oriented, although Growth At Reasonable Price (GARP) strategies can also be used where appropriate. 

Our investment research approach aim is often contrarian, looking to capitalise on overly sceptical or optimistic consensus views. In terms of valuation techniques, the focus is on PBV ratio to ROE, PE multiples and dividend yield, as well as the application of PEG ratios and, where appropriate, Sum of the Parts (SOTP) valuations.

Equity Bottom-Up

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<li>
<a href="https://www.smartkarma.com/entities/28062" target="_blank" data-smartkarma-citation="entities:28062:1">Almacenes Exito SA (EXITO CB)</a> is the leading food retailer in Colombia, with more than 7m clients and 603 stores in the country. Éxito owns and runs supermarkets, hypermarkets and cash and carry stores in Colombia, as well as owning supermarket interests in Brazil (through its stake in Grupo Pao de Açucar), Argentina (Libertad) and Uruguay (Disco, Devoto, Geant)</li>
<li>Éxito has a 50% interest in the Tuya card business, one of the largest credit card operations in Colombia run with its other 50% joint venture partner <a href="https://www.smartkarma.com/entities/27686" target="_blank" data-smartkarma-citation="entities:27686:1">Bancolombia SA (PFBCOLO CB)</a>. At YE 2018, Tuya had 2.4m issued credit cards and a loan portfolio of USD832m</li>
<li>The size of the credit portfolio limits our valuation of Tuya to between USD132-191m, which implies a 2018 PBV ratio of 1.4-2x, although we believe that there is upside risk to our 2x PBV valuation of Tuya, should BanColombia want to acquire Éxito’s 50% stake. This valuation range is - for Éxito’s 50% of Tuya - equivalent to 9%-14% of Almacenes Éxito’s market capitalisation net of its Grupo Pao de Açucar equity stake</li>
<li>Despite its modest valuation multiples, we believe that Éxito's valuation and re-rating potential is limited by the debt burden challenges of its majority shareholder <a href="https://www.smartkarma.com/entities/21422" target="_blank" data-smartkarma-citation="entities:21422:1">Casino Guichard Perrachon Sa (CO FP)</a>; Casino is a high leveraged restructuring-in-process corporate, and an investor sentiment drag on Éxito's potential re-rating</li>
</ul>



Almacenes Exito SA (EXITO CB) is the leading food retailer in Colombia, with more than 7m clients and 603 stores in the country. Éxito owns and runs supermarkets, hypermarkets and cash and carry stores in Colombia, as well as owning supermarket interests in Brazil (through its stake in Grupo Pao de Açucar), Argentina (Libertad) and Uruguay (Disco, Devoto, Geant)
Éxito has a 50% interest in the Tuya card business, one of the largest credit card operations in Colombia run with its other 50% joint venture partner Bancolombia SA (PFBCOLO CB). At YE 2018, Tuya had 2.4m issued credit cards and a loan portfolio of USD832m
The size of the credit portfolio limits our valuation of Tuya to between USD132-191m, which implies a 2018 PBV ratio of 1.4-2x, although we believe that there is upside risk to our 2x PBV valuation of Tuya, should BanColombia want to acquire Éxito’s 50% stake. This valuation range is - for Éxito’s 50% of Tuya - equivalent to 9%-14% of Almacenes Éxito’s market capitalisation net of its Grupo Pao de Açucar equity stake
Despite its modest valuation multiples, we believe that Éxito's valuation and re-rating potential is limited by the debt burden challenges of its majority shareholder Casino Guichard Perrachon Sa (CO FP); Casino is a high leveraged restructuring-in-process corporate, and an investor sentiment drag on Éxito's potential re-rating


Almacenes Éxito: In the Shadow of Its Challenged Parent