Recurring net income (pre-tax): EGP510.3mn, +16% Y-o-Y, +6% Q-o-Q, 0% vs. EFGe Reported net income: EGP395.7mn, -8% Y-o-Y, +46% Q-o-Q, -5% vs. EFGe Revenue: EGP1,926.9mn, +8% Y-o-Y, +4% Q-o-Q, -4% vs. EFGe EBITDA: EGP636.5mn, +10% Y-o-Y, +5% Q-o-Q, -7% vs. EFGe   Eastern Company released its 4Q15/16 results (ending 30 June 2016) details, with headline earnings coming in at EGP396mn, down 8% Y-o-Y, deflated by higher taxes, as 4Q14/15 saw the retroactive adjustment of the tax rate to 22.5% from 30%. Pre-tax recurring earnings (excluding capital gains, provisions, FX gains) were up 16% Y-o-Y, driven by revenue growth and higher net interest income (up over three-folds to EGP36mn) and were perfectly in line with our numbers. For FY15/16, recurring earnings post appropriations grew 18% Y-o-Y to EGP1.44mn. Revenue increased 8% Y-o-Y (-4% vs. EFGe), driven largely by higher under-licence revenue, which grew 55% Y-o-Y (partly due to EGP devaluation as fees are in USD). Gross margin (ex. lease expense) was flattish (+10bps Y-o-Y) at 37.1% (below our 40.2% estimate), with gross profit +8% Y-o-Y (-11% vs. EFGe), mainly due to tame growth (+4%) in labour costs. EBITDA margin, meanwhile, improved c60 bps Y-o-Y to 33.0% (vs. our estimate of 34.2%), as SG&A costs fell 5% Y-o-Y. Accordingly, EBITDA advanced 10% Y-o-Y (-7% vs. EFGe).   Proposed DPS came in at EGP11 (below our EGP12.0 estimate), implying a DPO of 37%, lower than an average of c50% in the past four years, and a dividend yield of 5.3%. We do not rule out an increase in the DPS at the company’s AGM on 19 October 2016.   We have a Buy rating on Eastern Co. and will be revising our numbers to reflect the results and the recent increase in cigarette prices. (Earnings release, Hatem Alaa, Nada Amin)   Eastern Company: EGP207.34 as of 03 October 2016, Rating: Buy, FV: EGP310.00 per share, MCap: USD1,167mn, EAST EY / EAST.CA