| Valuation method | Value, $ | Upside, % |
|---|---|---|
| Artificial intelligence (AI) | 2.70 | -61 |
| Intrinsic value (DCF) | 0.59 | -91 |
| Graham-Dodd Method | n/a | |
| Graham Formula | 6.20 | -9 |
Cementos Pacasmayo S.A.A. (NYSE: CPAC) is a leading Peruvian cement and construction materials company with a vertically integrated business model. Founded in 1949 and headquartered in Lima, the company operates across three key segments: Cement, Concrete and Precast; Quicklime; and Construction Supplies distribution. CPAC serves Peru's growing construction sector through its diversified product portfolio, including cement for residential, commercial, and infrastructure projects, ready-mix concrete, precast concrete products, and quicklime for industrial applications. The company maintains a robust distribution network of 240 independent retailers and 379 hardware stores, complemented by direct sales to construction firms and government entities. As Peru's economy continues to develop, Cementos Pacasmayo benefits from its strategic position in the basic materials sector, supplying essential inputs for housing, commercial construction, and mining infrastructure. The company's subsidiary status under Inversiones ASPI S.A. provides additional financial stability in Peru's competitive construction materials market.
Cementos Pacasmayo presents a specialized play on Peru's construction and infrastructure growth, with a low beta (0.159) suggesting relative stability versus broader markets. The company demonstrates solid profitability (2023 net income: $198.9M on $1.98B revenue) and cash flow generation ($321M operating cash flow), supporting its dividend (current yield ~3.5%). However, investors should weigh high leverage (total debt $1.5B vs. $72.7M cash) against Peru's political/economic volatility. The stock may appeal to investors seeking: 1) exposure to Andean infrastructure development, 2) a vertically integrated cement producer with distribution control, and 3) a dividend-paying materials stock. Key risks include commodity price fluctuations, regional competition, and Peru's macroeconomic conditions.
Cementos Pacasmayo maintains competitive advantages through its regional focus and vertical integration in northern Peru. The company's proximity to key markets reduces transportation costs versus national competitors, while its ownership of limestone reserves (essential for cement production) provides input cost control. CPAC's diversified product mix—spanning construction cement, industrial quicklime, and distributed building materials—allows cross-selling opportunities and mitigates sector cyclicality. The extensive retail/hardware store network creates barriers to entry in distribution. However, the company faces intensifying competition from Grupo Gloria's Cemento Andino and UNACEM (merged Cementos Lima and Cemento Andino), which benefit from greater scale in central/southern Peru. CPAC's strategy emphasizes: 1) premium product branding for specialized applications, 2) logistical efficiency in its core northern territory, and 3) government contract expertise. While smaller than some regional peers, CPAC's focus on higher-margin precast products and industrial quicklime (used in mining) differentiates its revenue streams. The company's debt load may constrain expansion versus better-capitalized rivals, but its ASPI Group backing provides strategic flexibility.