The Minister of Health and Population has officially announced increases in retail prices of 3,010 medicines (out of over 12,000 registered in Egypt), including locally produced and imported products. The decision stipulates increasing retail prices for locally produced medicines as follows: i) 50% increase on medicines selling for less than EGP50; ii) 40% increase on medicines selling between EGP50-100; iii) 30% increase on medicines selling for more than EGP100. About 96 of EIPICO’s (PHAR.CA) registered products (EIPICO has over 315 registered medicines) will witness an increase in their retail prices (according to media reports); by c50% as they sell mostly for less than EGP50. These include some best-selling antibiotics; hence, the impact on revenue will be significant, in our view. The increase in the retail price will be shared by producers, distributors and pharmacies; the exact ex-factory price increase will be confirmed after the dispute on the pharmacy margin is solved.     We reiterate our Buy rating, as we believe there is room for further multiple expansion. Our forecasts already incorporate gradual price increases over 2017-19. However, the exact impact of January 2017 increase vs. our estimates for FY17 will depend on the contribution of medicines that will see a price increase to revenue and profitability and the production mix; i.e., there is room for upside to our current forecasts. We expect substantial revenue growth in 1H17, as it will benefit from two waves of price increases; May 2016 (+20% in retail prices of products selling below EGP30) and January 2017 increase. We expect the pressure on margins due to the EGP float to be also mitigated by EIPICO’s inventory of raw materials and finished products, as well as FC revenue. (Al Ahram, Al Masry Al Youm, Wafaa Baddour, Adham El Badrawy)   EIPICO: EGP90.00 as of 12 January 2017, Rating: Buy, TP: EGP105.00 per share, MCap: USD386mn, PHAR EY / PHAR.CA