Initiating Coverage of Simpar including its subsidiaries Movida and Vamos

Subsidiary strength supports stability, but asymmetric risk favors operating-company bonds over the holding company

We think Simpar’s credit profile is supported by the group’s diversified and scaled asset based services platform, which reduces reliance on any single business line and provides a degree of earnings resilience through the cycle. The group benefits from leading market positions across several segments, including truck and equipment rental at Vamos, logistics at JSL, and light vehicle rental at Movida, which we see as strengthening competitive positioning and supporting stable demand even in a weaker macro backdrop. A meaningful share of revenues is backed by medium and long term contracts and recurring activity, which we view as a key positive for cash flow visibility and predictability and as limiting exposure to Brazil’s more volatile economic cycles.