Auna SA: Navigating Challenges to Unlock Latin America’s Healthcare Potential

The healthcare sector in Latin America is ripe for consolidation, and Auna SA stands out as a leader leveraging regional integration to drive resilience amid macroeconomic and operational headwinds. With a 20% year-over-year surge in adjusted EBITDA and a strategic pivot toward debt reduction, the company is primed to capitalize on undervalued shares and underpenetrated oncology markets. This analysis explores why Auna’s multi-market model—bolstered by Peru’s proven efficiency, Mexico’s evolving operational framework, and Colombia’s cash-focused pragmatism—positions it as a compelling buy for investors.

Peru: The Engine of Stability
Peru’s healthcare division delivered a staggering 51% YoY rise in adjusted EBITDA to S/371 million, driven by vertical integration, membership price adjustments, and oncology plan optimization. The oncology portfolio alone now boasts 998,000 members, with a medical loss ratio (MLR) of 53.0%—a 2.4 p.p. improvement over 2023. This efficiency underscores Peru’s role as the company’s financial anchor.

The region’s 71.6% capacity utilization and margin expansion to 21.2% highlight the scalability of Auna’s integrated model. With 7% quarterly growth in plan memberships and a mature ecosystem, Peru’s performance is a testament to the company’s ability to monetize demand in a growing market.

Mexico: Transitioning Toward Long-Term Gains
Mexico’s adjusted EBITDA rose 10% to S/410 million, despite initial setbacks from the “AunaWay” operational rollout. Physician adaptation delays and volume dips in early 2024 forced management to recalibrate, scaling back aggressive targets in favor of gradual implementation. Yet, the partnership with Opción Oncología—a five-year oncology services agreement—signals strategic focus.

The leverage ratio dropped to 3.56x by year-end 2024, a 21% reduction from 4.5x in late 2023. This progress aligns with Mexico’s cash flow prioritization, with hospitalization and ICU therapy revenues driving 4Q24 surgery volume growth. While full AunaWay benefits may lag, the oncology expansion solidifies Mexico’s role as a growth driver.

Colombia: Navigating Payor Headwinds
Colombia’s challenges with payor interventions (e.g., Nueva EPS) pressured EBITDA, but Auna’s proactive measures—reallocating volumes to stable payors and prioritizing cash flow—prevented deeper losses. Despite a S/28 million impairment charge, revenue grew 14% in local currency via risk-sharing models.

The region’s focus on liquidity over top-line growth is a prudent move. As payor dynamics stabilize, Colombia’s diversified revenue streams could reaccelerate EBITDA in 2025.

Valuation: PEN-Denominated Bargain
Auna’s shares trade at a discount relative to its peers, with a forward P/EBITDA of ~9x—well below regional healthcare averages. The PEN’s appreciation against the USD and MXN in 2024 further bolsters earnings visibility.

Crucially, the company’s 2025 guidance targets 20% EBITDA growth (FX-neutral), supported by Peru’s stability, Mexico’s oncology expansion, and Colombia’s risk mitigation. With net debt now at 3.56x EBITDA and a clear path to sub-3.0x by 2026, deleveraging creates room for shareholder returns or M&A.

Catalysts for Upside
1. Oncology Dominance: Auna’s oncology plans, now at 53% MLR, are a cost-efficient growth lever. Mexico’s partnership with Opción Oncología could unlock $100 million+ in annualized revenue by 2026.
2. Leverage Reduction: Excess 2025 cash flow (projected ~S/500 million) will accelerate debt paydown, lowering interest costs and improving margins.
3. Peru’s Scalability: With 72% capacity utilization, further integration or pricing adjustments could push margins toward 25%.

Risks, but Manageable
Colombia’s payor disputes remain a short-term risk, though Auna’s payor diversification limits exposure. Mexico’s AunaWay rollout could face further teething issues, but the gradual approach reduces execution risk.

Investment Thesis
Auna SA is a rare opportunity to invest in a Latin American healthcare leader with:
- A proven, scalable model in Peru.
- A transitional phase in Mexico with oncology upside.
- A disciplined Colombia strategy prioritizing cash flow.
- Undervalued shares and a deleveraging trajectory.

The combination of EBITDA resilience, oncology leadership, and PEN-denominated exposure makes Auna a compelling buy. With shares trading at a 20% discount to intrinsic value and a 2025 dividend reinstatement likely, now is the time to position for long-term gains.

Action: Buy Auna SA shares. Target: S/50 by end-2025. Risk: S/35 if Colombia’s payor issues escalate.