Eastern Company announced that it has raised retail prices for its own brand Cleopatra Queen (c15% of total volume sold) by 14% to EGP12.0/pack, effective today. The hike implies an ex-factory price increase of 36% for the brand, adding over EGP300mn to top-line (+3%). The company also raised prices for another brand (Cleopatra Super), but we expect a negligible impact from the increase due to its small volumes. The increase will likely have a limited bottom-line impact due to FX pressures on margins. While this price increase is not in and of itself significant, management indicated to us that there would be similar price increases applied to the company’s entire portfolio over the coming months (which would have a more significant impact) to offset cost pressures from a weaker EGP. We had noted before that the implementation of the recent tax changes still leaves EC with room to raise ex-factory prices for its best-selling brands c65%, while only raising retail prices c24%.   We reiterate our Buy rating on the stock, as we expect earnings momentum to be supported by price increases and continued deleveraging; we also expect the stock to continue to re-rate, given its low multiples. (Company disclosure, Nada S. Amin, Hatem Alaa)   Eastern Company: EGP155.00 as of 12 January 2017, Rating: Buy, TP: EGP334.00 per share, MCap: USD419 million, EAST EY / EAST.CA