Promigas E.S.P looks to a promising future with 35% revenue growth

Intrinsic Valuation Analysis: Promigas S.A. and the Strategic Consolidation of Zelestra LATAM

The recent structural transformation of Promigas, underscored by the acquisition and consolidation of the Zelestra platform, represents a paradigm shift in shareholder value creation. From a technical perspective, the company has evolved from a pure-play gas transport utility into a diversified energy conglomerate. The local market, currently operating under constrained liquidity levels, exhibits a significant valuation inefficiency, with the share price trading near $6,400. This valuation largely ignores a record CAPEX deployment that has surged from $600 billion COP in 2020 to a projected figure exceeding $1.6 trillion COP by the end of fiscal year 2025.

The valuation of Zelestra LATAM, based on precedent transaction multiples for renewable assets in the Andean Region and the Southern Cone, is estimated at an Enterprise Value (EV) range of USD $880 million to USD $1.180 billion. This platform, boasting a total capacity (installed and under development) of 3.5 GW, provides critical strategic optionality: revenue streams denominated in U.S. Dollars from markets such as Chile and Peru. This geographic and currency diversification mitigates foreign exchange volatility and local regulatory exposure. The financial leverage observed on the balance sheet (Current Liabilities of $1.67 trillion COP) is strictly productive, earmarked for the completion of solar farms which, upon reaching Commercial Operation Date (COD), are expected to drive consolidated EBITDA margins toward the 48% - 50% range.

A fundamental pillar of this thesis is the tax benefit derived from Law 1715, which allows for a 50% income tax deduction on investments. This "fiscal shield" directly injects an estimated $60 to $80 COP in additional Earnings Per Share (EPS) into the consolidated net income, more than offsetting the financial cost of the debt. With a projected Net Income of $1.18 trillion COP and an EPS of $1,047, the stock is currently trading at a P/E ratio of 6.1x—substantially lower than the historical and sector average of 10x. A simple mean reversion of the P/E multiple would place the target price above $10,400 COP.

Finally, the core natural gas component, bolstered by the SPEC regasification plant operating at 100% capacity, ensures recurring cash flows amid the domestic supply deficit. Utilizing a Sum-of-the-Parts (SOTP) methodology, the technical valuation yields a target price of $12,400 COP. This is comprised of the traditional gas transport and distribution business ($8,500), the market valuation of the Zelestra platform ($2,900), and the Brilla non-bank credit portfolio. At current prices, investors capture a Dividend Yield exceeding 9%, while the market gradually prices in the company’s transition toward a low-emission energy infrastructure with inflation-protected cash flows.