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Desarrolladora Homex S.A.B. de C.V. 07 July 2008

Update Report – 1Q 08 Results

Higher prices expected to offset lower volume growth in FY 2008

Common BUY Fundamental research indicates a 22% upside in the common stock over the next 6-24 months. We
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prices obtained using DCF and comparative valuation methodologies.

Ticker: HOMEX.MX
Target price: MXN121.01
Current price: MXN99.321 We reiterate the common stock a BUY with a 6-24 month target price of MXN121.01.

ADR BUY The ADR is expected to appreciate approximately 22% over the next 6-24 months, in line with our
fundamental upside. We have changed our investment horizon from medium term to long term as we
no longer anticipate a significant currency impact on the ADR over the medium term2.

Ticker: HXM
Target price: US$69.81
Current price: US$57.301 We reiterate the ADR (1 ADR = 6 common shares) a BUY with a 6-24 month target price of US$69.81.

Supervisor: Shilpen Shah

Analyst: Jayant Saboo
Editor: Matthew Bridle
Global Research Director:
Satish Betadpur, CFA
Investment horizon - short term actionable trading strategies
This report addresses the needs of strategic investors with a long term investment horizon of 6-24 months. If this
report is provided to you by your broker under the Global Settlement, you may now also access (free of charge) the
short term trading outlook that we publish from time to time for this issuer, looking at the coming 5-30 days for
readers with a shorter trading horizon. These are available online only at www.researchoracle.com

Next news due:

2Q 08 results, 22 July 2008
Report summary
Desarrolladora Homex S.A.B. de C.V.’s (Homex) 1Q 08 total revenues and adjusted net income3 were
broadly in line with our expectations. Homex witnessed robust y-o-y revenue growth in both its
Affordable Entry Level (AEL) and Middle Income Housing level (MIHL) segments. Going forward despite
weakness in the global housing market, we expect revenue growth of 17.2% y-o-y in FY 2008, given
rising realized prices and an expansion of financing from INFONAVIT. Moreover, the company intends
to expand its total revenue contribution from the MIHL segment to at least 30% in the coming years, as
the segment generates higher profitability. Furthermore, we are optimistic that the current slowdown in
the US residential sector will not significantly impact the company’s operations, as housing demand in
Mexico, where it derives the majority of its revenues, remains strong, coupled with the provision of
more home loans from INFONAVIT and other financing companies. Hence, we believe the Homex
common stock provides an attractive investment opportunity over the medium term.

Currency impact for US investors

The impact by itself of the anticipated currency movements on the ADR (now US$57.30), without
considering changes in the share price, is broadly neutral and is expected to be:

Over 6 months: US$57.30

Over 12 months: US$60.81
Over 24 months: US$57.30

Page 1 Refer to page 4 for footnotes