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Key Info

Cia Energetica de Sao Paulo Web - www.cesp.com.br

Tel - 55-11-5613-2100

Next Reporting Date - 15.05.2019

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Renewable Electricity Sector Link to Midlincoln Rural Investment Banking Ideas

From Water into Utilities Sector

Heating, Water, ElectrInstallation and Repair


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    Cia Energetica de Sao Paulo

    Utilities

    BRAZIL


    DCF Model Assumptions

    Risk Free Rate

    5.92%

    Country Equity Risk Premium

    6.00%

    Cost of Debt

    5.33%

    Cost of Debt

    5.33%

    Long Term Growth

    2.00%

    Beta Assumption

    0.52

    Current Market Cap mln$

    2,116.87

    Net Debt mln$

    -50.27

    WACC Estimate

    9.13%

    Ordinary Current Price $

    6.81

    DCF Model

    DCF20152016201720182019F2020F2021F2022F2023F2024F2025F2026F2027F2028F2029F
    Revenue899.13481.87462.62449.95536.67447.38354.32255.77151.97106.7875.0352.7237.0526.0318.29
    EBITDA Costs621.90313.81400.81280.96379.86320.26258.15192.37123.0989.9065.6647.9535.0225.5818.68
    EBITDA277.23168.0661.81168.99156.81127.1296.1763.4028.8816.899.384.772.020.45-0.39
    EBITDA Margin30.8334.8813.3637.5629.2228.4127.1424.7919.0015.8112.499.055.461.74-2.14
    Operating Costs762.18402.86499.54368.07479.55409.99337.48260.70179.82136.99104.3679.5060.5746.1435.15
    Operating Profit136.9679.00-36.9281.8857.1237.4016.84-4.93-27.86-30.21-29.33-26.78-23.52-20.11-16.86
    Operating Margin15.2316.40-7.9818.2010.648.364.75-1.93-18.33-28.29-39.09-50.79-63.48-77.24-92.16
    Pretax Costs871.47340.00483.61371.67477.04380.64280.16173.7761.7035.2020.0811.456.533.732.13
    PTP27.67141.87-20.9978.2859.6366.7474.1582.0090.2771.5954.9641.2730.5122.3016.17
    Pretax Margin3.0829.44-4.5417.4011.1114.9220.9332.0659.4067.0473.2478.2882.3785.6888.38
    Net Income Costs750.98393.76515.42376.21481.92415.86347.01274.10197.31154.17120.4794.1373.5557.4744.91
    Net Income148.1588.11-52.8073.7454.7531.527.30-18.33-45.34-47.39-45.43-41.41-36.51-31.44-26.62
    Net Margin16.4818.28-11.4116.3910.207.042.06-7.17-29.83-44.38-60.55-78.54-98.54-120.78-145.51
    Revenue Less Capex920.23485.12464.17453.38542.45449.41352.43249.73141.5697.1966.7345.8131.4521.5914.82
    Capex-21.09-3.26-1.55-3.43-5.79-2.031.896.0410.419.598.316.915.604.443.47
    Capex to Revenues-2.35-0.68-0.34-0.76-1.08-0.450.532.366.858.9811.0713.1115.1017.0518.95
    Revenue less FCF545.37315.68388.42352.16384.30345.16304.35261.14215.63184.40157.69134.86115.3298.6284.34
    FCF353.76166.1974.2097.79152.36102.2349.97-5.37-63.66-77.62-82.66-82.13-78.28-72.59-66.05
    FCF to Revenue39.3534.4916.0421.7328.3922.8514.10-2.10-41.89-72.69-110.17-155.78-211.29-278.86-361.08

    BRAZIL Comparables

    tickercompanycountryMarket Cap
    2019
    PE RATIO
    2019
    PE RATIO
    2020
    EV/EBITDA
    2019
    EV/EBITDA
    2020
    P/S
    2019
    DIVIDEND YIELD
    2019
    EBITDA Margin
    2019
    P/B
    2019
    ROE
    2019
    6 month return
    2019
    ELET3 BZCentrais Eletricas Brasileiras SABRAZIL 11500.2513.538.197.987.701.362.8034.660.892.5532.15
    ELET6 BZCentrais Eletricas Brasileiras SABRAZIL 11500.2514.548.807.987.701.363.5634.660.962.5527.41
    SBSP3 BZCia de Saneamento Basico do Estado de Sao PauloBRAZIL 7634.5710.279.426.556.121.942.4239.611.3814.1547.78
    CPFE3 BZCPFL Energia SABRAZIL 7468.0612.8212.829.118.551.23-23.03-19.506.67
    CMIG4 BZCia Energetica de Minas GeraisBRAZIL 5673.7110.458.778.537.571.003.9119.151.3112.7313.04
    ENBR3 BZEDP - Energias do Brasil SABRAZIL 2680.7211.6410.566.786.190.824.3319.111.2210.3619.44
    CPLE6 BZCia Paranaense de EnergiaBRAZIL 2602.387.566.945.875.460.664.9321.670.668.8149.33
    TAEE11 BZTransmissora Alianca de Energia Eletrica SABRAZIL 2267.7711.7512.3910.4010.036.058.1279.432.0619.9413.39
    CESP6 BZCia Energetica de Sao PauloBRAZIL 2116.8739.7625.6211.128.765.393.7947.351.232.8430.41
    CSMG3 BZCia de Saneamento de Minas Gerais-COPASABRAZIL 2109.1113.5711.376.886.171.833.8336.201.319.3516.14
    ENEV3 BZEneva SABRAZIL 1568.5612.2110.006.606.221.860.0045.250.946.4032.44
    GETI4 BZAES Tiete SABRAZIL ------68.57-30.00#N/A N/A
    MPXE3 BZEneva SABRAZIL ------45.25-6.40#N/A N/A
    TBLE3 BZEngie Brasil Energia SABRAZIL ------54.76-37.98#N/A N/A

    International Comparables

    tickercompanycountry Market Cap
    2019
    PE RATIO
    2019
    PE RATIO
    2020
    EV/EBITDA
    2019
    EV/EBITDA
    2020
    P/S
    2019
    DIVIDEND YIELD
    2019
    EBITDA Margin
    2019
    P/B
    2019
    ROE
    2019
    6 month return
    2019
    NEE USNextEra Energy IncUNITED STATES 91227.6022.6420.9713.5912.524.962.6253.642.3210.7713.58
    DUK USDuke Energy CorpUNITED STATES 65815.5418.3217.3611.9911.262.594.1940.531.468.0212.82
    ENEL IMEnel SpAITALY 63084.0111.9411.027.046.720.725.8322.111.6012.6627.62
    D USDominion Energy IncUNITED STATES 61193.9418.1917.3411.8610.953.424.7846.242.2421.449.34
    IBE SMIberdrola SASPAIN 58373.4415.8014.659.508.871.414.5626.371.318.1727.36
    SO USSouthern Co/TheUNITED STATES 54581.2917.2816.6512.2711.742.424.7137.881.9611.5119.86
    EXC USExelon CorpUNITED STATES 48875.8916.0115.949.499.361.502.8727.761.469.4517.28
    AEP USAmerican Electric Power Co IncUNITED STATES 41858.1420.5519.2912.0211.212.553.1934.712.0910.4818.67
    EDF FPElectricite de France SAFRANCE 41653.3017.0013.064.353.960.532.9122.750.855.21-15.30
    3 HKHong Kong & China Gas Co LtdHONG KONG 36678.2132.4130.0626.8124.737.202.0430.284.1713.7325.59
    SRE USSempra EnergyUNITED STATES 34914.3721.1217.9814.2913.002.793.0435.981.9410.0014.70
    PEG USPublic Service Enterprise Group IncUNITED STATES 29794.9718.1016.8011.5610.762.853.1837.331.9511.1110.25
    XEL USXcel Energy IncUNITED STATES 28816.2021.4620.0611.5910.672.362.8932.522.2210.7217.14
    2 HKCLP Holdings LtdHONG KONG 28695.7617.9517.3511.4311.062.453.4527.551.8710.976.38
    ED USConsolidated Edison IncUNITED STATES 27633.5219.5018.5311.1110.432.183.5033.671.558.1612.78
    WEC USWEC Energy Group IncUNITED STATES 24542.0422.1420.8514.2213.243.103.0232.372.4111.2114.72
    EOAN GRE.ON SEGERMANY 23708.7514.0412.875.353.640.634.7314.743.2121.6911.83
    DTE USDTE Energy CoUNITED STATES 22749.7419.9218.8712.7211.661.603.0720.922.0010.4511.76
    PPL USPPL CorpUNITED STATES 22206.3612.6712.1210.229.662.765.3953.041.7216.365.50
    FE USFirstEnergy CorpUNITED STATES 21868.8515.9216.5110.7010.331.873.7033.572.9319.4514.28
    EIX USEdison InternationalUNITED STATES 20715.0814.3413.528.097.531.573.8635.841.8613.16-4.81
    AWK USAmerican Water Works Co IncUNITED STATES 19229.8429.7227.3615.1214.035.301.8650.473.1810.7921.94
    NTPC INNTPC LtdINDIA 18947.4311.769.899.608.361.373.2727.081.2210.388.26
    ETR USEntergy CorpUNITED STATES 18134.6517.9717.3010.589.751.573.8629.461.8610.6217.93
    AEE USAmeren CorpUNITED STATES 17733.9722.0420.5911.3410.452.792.7037.282.2010.2213.70
    TNB MKTenaga Nasional BhdMALAYSIA 16680.0812.3611.766.776.641.374.5630.591.119.50-11.19
    VER AVVerbund AGAUSTRIA 16498.4627.6320.7514.9312.284.491.7035.802.659.5810.64
    384 HKChina Gas Holdings LtdHONG KONG 16304.4416.2013.9512.9611.071.951.8518.373.7024.263.74
    FTS CNFortis Inc/CanadaCANADA 15746.9218.8317.8512.4411.722.383.6844.361.437.1113.61
    RWE GRRWE AGGERMANY 15639.1125.4512.1010.164.611.043.4610.931.173.5229.68