Embotelladora Andina S.A. (Andina) reported a decline in 3Q 09 net sales, in line with our estimate, reflecting negative exchange rate impact from Brazil and Argentine operations. However, operating margin and adjusted net margin were below our estimate, primarily due to higher-than-expected cost of sales, as a percentage of revenues and effective tax rate, respectively. As the results were broadly below our expectations, we are likely to revise our estimates and target price downwards. In light of these factors although the target price supports a BUY rating at current price levels, we downgrade the common stock from a BUY to a HOLD. We will reassess our target price and rating in our 3Q 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 horizon, and since the target price supports a BUY we reiterate the ADR a BUY. We will reassess our target price and rating in our 3Q 09 update report.

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