Net income – SAR61mn, +128% Y-o-Y, +12% Q-o-Q, +41% vs. EFGe Gross profit – SAR123mn, +40% Y-o-Y, -6% Q-o-Q, +8% vs. EFGe Net operating profit – SAR52mn, +97% Y-o-Y, -13% Q-o-Q, +14% vs. EFGe   Dallah announced its preliminary 3Q16 headline figures, showing stellar growth in earnings that shot up 128% Y-o-Y to SAR61mn (41% ahead of our estimate), driven by revenue growth and margin expansion. Revenue grew 22% Y-o-Y (5% ahead of our estimate) to reach SAR273mn, while EBIT margin expanded 7pp to c19% from a low base in 3Q15 (c1.5pp above our estimate). The company cited that the surge in revenue came on the back of an increase in the number of inpatients admitted and outpatient visits driven by the opening of the North-clinics building leading to higher utilisation rates, as well as improvement of some contractual terms for services that reflected positively on profitably. Earnings growth was also supported by the booking of gains on sale of investments. Earnings grew 12% Q-o-Q, despite dropping on the operational level (EBIT -13% Q-o-Q), due to booking investments gain in 3Q16 and booking revaluation loss on intangible assets in 2Q16. Gross profit was up 40% Y-o-Y (+8% vs. our estimate), driven by revenue growth and a 6pp margin expansion, while net operating profit grew a further 97% Y-o-Y, likely on further impact of economies of scale on SG&A. (Earnings release, Tarek El-Shawarby, Adham El Badrawy)   Dallah Healthcare: SAR78.75 as of 18 October 2016, Rating: Buy, FV: SAR103.00 per share, MCap: USD1,239mn, DALLAH AB / 4004.SE