Industry Trend Analysis - SMU In Strong Financial Position Following IPO - 13 MAR 2017

BMI View: SMU is in a strong position to continue to perform well in Chile ' s retail sector. The company ' s recent IPO has successfully managed to reduce its debt and improve its profitability margins. A steadily improving Chilean consumer should also play into this view, as the grocery retail market (which is the sector SMU is most exposed to) is still years away from maturity and households will increasingly look to formal stores. E-commerce could hold the key to the company outperforming over the long-term, as Chileans are tech-savvy with high penetration of smartphones and strong internet use.

Chilean retailer SMU S.A. debuted on the Santiago Stock Exchange on January 24 2017, raising USD200mn from the sale of a 24% stake. SMU was floated at a price of CLP113 per share, with the money generated expected to go towards reducing its heavy debt load and to a lesser extent to finance working capital. SMU is the largest supermarket retailer in Chile, measured by the number of stores and the third largest in terms of revenues for the year end December 2015 (latest available full year data). SMU is the holding company for a number of different Chilean retail brands:

  • Unimarc - a chain of supermarkets, the only grocery retailer with stores in all 15 regions of Chile.

  • SMU Recovers To Opening Price
    SMU S.A. Share Price (CLP)
    Source: Bloomberg, BMI

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