Reported net income: EGP427mn, +16% Y-o-Y, +8% Q-o-Q, +16% vs. EFGe Revenue: EGP1,918mn, +10% Y-o-Y, +2% Q-o-Q, +4% vs. EFGe EBITDA: EGP641mn, +5% Y-o-Y, +7% Q-o-Q, +5% vs. EFGe   Eastern Company released its 1Q16/17 results (ending 30 Sep. 2016) details, with headline earnings increasing 16% Y-o-Y (+16% vs. EFGe), driven by solid top-line growth and continued deleveraging. The company booked net interest income (including lease costs) of EGP2mn vs. net interest costs of EGP52mn a year ago (EFGe: EGP30mn). Revenue increased 10% Y-o-Y (+4% versus EFGe), driven by 19% growth in under-licence revenue (partly due to a weaker EGP as fees are in USD). Also, the quarter saw nearly a one-month impact from the ex-factory price increases on EC’s brands (+25% for best-sellers) that were effective from 8 Sep. 2016.   Gross margin (ex. lease expense) fell c90bps Y-o-Y (+10bps Y-o-Y) at 37.5% (EFGe: 36.7%), with gross profit +7% Y-o-Y (+7% vs. EFGe), mainly as raw material costs increased 12% (labor: +9%). EBITDA margin fell a more significant c1.5pp Y-o-Y to 33.4% (in line) as SG&A costs spiked 31% (+22% vs. EFGe). Accordingly, EBITDA advanced 5% Y-o-Y (+5% vs. EFGe).   Overall, a solid results set, with earnings momentum set to improve in coming quarters due to last September’s price increase. We reiterate our Buy rating on the stock. (Earnings release, Hatem Alaa, Nada S. Amin)   Eastern Company: EGP280.06 as of 20 November 2016, Rating: Buy, FV: EGP334.00 per share, MCap: USD809mn, EAST EY / EAST.CA