Attractive Yields Supported by a Positive Outlook

• Mexico's infrastructure competitiveness remains among the top in Latin America. According to the World Economic Forum, Mexico ranks 49 out of 140 countries in the infrastructure competitiveness index, making it the second Latin American country with the highest rank (Chile ranks 41). On the other hand, the Mexican Federal Government, in its Infrastructure and Highway program for the 2025-2030 period, contemplates an investment of. P$173.4 billion to increase connectivity across industrial clusters and cover other road necessities in the country.
• We are initiating coverage in PINFRA, FVIA, FIDEAL, and FORION, names with exposure to the highway sector in Mexico. From a potential return perspective, FVIA is our preferred name within Highways Operators, given its attractive potential upside relative to our 12M PT of P$21.7, an IRR of 23%, and a solid 9% dividend yield. PINFRA (Outperform, 12M PT of P$295.0) remains as the leading company in the sector, with also an Outperform rating, followed by FORION (Outperform, 12M PT of P$1,022.0), a name with an attractive 14% dividend yield by 2026. In Contrast, FIDEAL (Underperform, 12M PT of P$83.0) offers the lowest IRR and has a negative potential return to our PT.

According to the World Economic Forum, Mexico ranks 49 out of 140 countries in the infrastructure competitiveness index, making it the second Latin American country with the highest rank (Chile ranks 41, while Ecuador, Uruguay, and Panamá rank 59, 62, and 66, respectively). The top-ten countries worldwide are: 1) Singapore; 2) Hong Kong; 3) Switzerland; 4) the Netherlands; 5) Japan; 6) Korea; 7) Germany; 8) France; 9) the United States; and 10) Spain. In Mexico, the Ministry of Infrastructure, Communications, and Transport (SICT, for its acronym in Spanish) divided the most relevant roads into 15 main Corridors. These corridors demonstrate the high connectivity between the country's northern and southern regions. At the end of 2023, the highway network totaled 407.8 thousand km of roads. The states with the highest km density are Oaxaca, Jalisco, Veracruz, Chiapas, and Sonora.

The Mexican Federal Government, in its Infrastructure and Highway program for the 2025-2030 period, contemplates an investment of. P$173.4 billion to increase connectivity across industrial clusters and cover other road necessities in the country. The most significant investment within this program (68% of the total) is P$118.5 Bn, allocated to improve, develop, or construct highways designated as “Ejes Prioritarios”. This is positive, since the connectivity to industrial clusters, cities, and new housing development projects may increase.