The declarations of the new secretary of Projects and Strategic Actions of São Paulo, the federal deputy Rodrigo Maia (without party-RJ), on the privatization of Sabesp (SBSP3) they messed with the market this last friday (20).
Maia spoke about his main goals in his new position, including the privatization of the São Paulo sanitation company.
“I think it’s a symbolic thing to organize the privatization, the concession, to keep it organized until the end of my term”, explained Maia when asked about his priorities as head of the ministry.
But the claims were called into question after the governor of São Paulo, João Doria (PSDB-SP), comment that the Sabesp will be prepared to be privatized in the coming years and the government will not do anything rash.
To the Great Investments, Rodrigo Maia is a fundamental ally for the tucano government, given its high power of articulation, as in the social security reform in 2019, the main name for the approval of the proposal.
“We believe in your name as an interesting agent for unlocking complex agendas,” said Vitor Sousa upon signing the broker’s report.
In addition, the financial sector specialist reported that the sale of the company may take place after the 2022 elections, given that Doria is presidential and the candidate’s non-involvement in any controversial issue may reduce the chances of losing votes.
“Regardless of whether or not the privatization of the company materializes, advances in the construction of the project can be inherited by the next governor of the state of São Paulo”, commented Sousa.
According to Genial, the probability that the future resident of Palácio dos Bandeirantes will continue Doria and Maia’s project is extremely high, as Geraldo Alckmin is the favorite to win the elections for governor in 2022.
“We don’t think Alckmin’s name is bad for the privatization case – it is worth mentioning that with the approval of the New Basic Sanitation Framework, sanitation assets tend to trade at much higher levels compared to past years, which can do with that the interest in the privatization of the company be carried forward”, said the broker.
How are the company’s shares?
According to Sousa, Sabesp’s shares already have a potential for an increase of 10%, but with privatization, shares may rise by up to 58.5%. One of the factors for this upside is the depressed valuation.
“In fact, we see all sanitation companies negotiating with depressed valuations, one of the reasons for this is possible previous frustrations with privatization (as in the cases of Sabesp and Copasa),” said the analyst.
Thus, the broker has a purchase recommendation for the São Paulo company with a target price of R$58.
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