Embotelladora Andina S.A. (Andina) reported better-than-anticipated operating and net performance in 4Q 09. Although we are likely to revise our estimates upwards, at current levels we believe the stock is fairly priced and consequently we reiterate our common stock rating a HOLD. We will reassess our target price and rating in our 4Q 09 update report. As we expect a significant positive currency impact on the ADR (1 ADR = 6 common shares) over our 6-12 month investment…

Although we expect Chilean and Brazilian operations to register a y-o-y decline in revenues in FY 2009 due to poor performance in 1H 09, we expect these operations to register y-o-y growth in FY 2010 driven by an increase in volumes and Average Selling Price (ASP). The company has launched several new products such as Fanta Uva, Aquarius, Sucos del Valle and the Crystal mineral in Chile and Brazil which we believe will diversify the company's product lines and boost top-line....

Going forward, we expect Chilean operations to register 1.6% and 6.6% y-o-y growth in revenues in FY 2009 and FY 2010, respectively, driven by increase in volumes and Average Selling Price (ASP). We expect volumes to post strong growth, primarily driven by the carbonated drinks segments. However, we expect cost of sales in FY 2009 to remain flat as we expect increase in sugar prices and higher concentrate cost to be offset by lower PET resin prices....