2025-06-09-花旗集团-Raizen（RAIZ4）_瑞森（RAIZ4.SA）2025年第四季度模型更新_运营优化与调整期_15页_616kb

Citigroup Research: Raízen (RAIZ4.SA) - Model Update & Investment Thesis

Investment Recommendation

• Rating: Buy
• Target Price (TP): R$2.5 per share (down from R$3.00 previously, reflecting lower sugar prices, reduced sugarcane crushing, and ongoing deleveraging challenges).
• Expected Total Return (12M): 26.3%
• Key Concern: Sustained negative free cash flow (FCF) due to high financial expenses and CAPEX (~R$2bn disbursement over 2 seasons for E2G plants).

Valuation & Model Adjustments

• Scenario: Market share gains in fuels through operational efficiencies and anti-illegal-trade measures.
• EPS Projections:
  • 2025: R$-0.41
  • 2026E: R$-0.17 → 2027E: R$0.03 (turnaround driven by bioenergy expansion).
• Valuation Ratios:
  • EV/EBITDA adj: 2025A: 3.2 → 2026E: 3.6
  • PE 2025: -4.8 (reflects losses).
• Funding Strategy: Reduced leverage via M&A or capital raise (Valor news, 02/07/2025).

Catalysts & Risks

Upside:

1. Bioenergy demand growth (Europe’s appetite for E2G, pellets, biogas).
2. Ethanol-electric hybrid EV adoption boosting ethanol demand.
3. Global sugar deficit (Indian subsidy withdrawal → higher prices).

Downside:

1. E2G project execution risks (commercialization, operational inefficiencies).
2. Accelerated EV adoption reducing transition fuel demand (ethanol, bioenergy).
3. European energy policy uncertainties affecting biofuel demand.

Moody’s Take

• 2024 Revenue Decline (-10.3%) vs. 2025 Recovery (15.8%).
• Bioenergy segment is the primary growth driver, but face longer-term substitution risks from pure EVs.
• Current low valuation may position RAIZ4 as a proxy for Brazil's interest rate sensitivity (falling rates would amplify FCF impact).

Key Highlights

• Company Segmentation: Raízen Energia (world’s largest sugarcane producer) + Raízen Fuels (2nd-largest fuel distributor).
• FCF Focus: Bioenergy investments need time; FCF generation unlikely short-term despite catalyst hopes.
• Dividend Yield Expected: 0.0% (contingent on turnaround).