2Q16 results highlights: i) Net Income – SAR186 mn, -24% Y-o-Y, +28% Q-o-Q, -8% vs EFGe; ii) Gross Profit – SAR201 mn, -24% Y-o-Y, +28% Q-o-Q, -7% vs EFGe; and iii) Operating Income – SAR192 mn, -24% Y-o-Y, -33% Q-o-Q, -5% vs EFGe   Advanced reported its 2Q16 results highlights showing a robust operational performance with earnings of SAR186 mn (+28% Q-o-Q). We believe the solid operational results were mainly due to i) higher polypropylene (PP) prices (+12% Q-o-Q); as well as ii) an 18% Q-o-Q expansion in the PP-propane spreads. Regarding the South Korean project, Advanced revealed that its investment in SK Advanced was actually profitable during the quarter, as we had anticipated, and contributed earnings of SAR8 mn to the company in 2Q16.     While earnings slightly missed our estimates of SAR201 mn, we note that the company again accounted for a provision for impairment loss of SAR9 mn related to available for sale investments, which we had not accounted for in our estimates. Excluding the impact of the SAR9 mn provision, Advanced would have achieved earnings of SAR195 mn, much closer to our estimate (only -3% vs EFGe).          Overall, we believe the results support our view of Advanced as a defensive spread based play in the chemical space and affirms our tactical call on PDH based propylene producers' ability to generate healthy returns in 2Q16. At its current share price, however, Advanced seems to offer little room for upside; hence, we remain Neutral on the stock. (Company, Yousef Husseini)   Advanced: SAR47.48 as of 10 July 2016, Rating: Neutral, FV: SAR47.00 per share, MCap: USD2,076mn, APPC AB / 2330.SE