Net income: SAR58.8mn, +4% Y-o-Y, +18% Q-o-Q, -3% vs. EFGe Revenue: SAR315.2mn, +13% Y-o-Y, +13% Q-o-Q, -1% vs. EFGe Gross profit: SAR94.6mn, +11% Y-o-Y, +23% Q-o-Q, -3% vs. EFGe Operating profit: SAR62mn, +9% Y-o-Y, +22% Q-o-Q, -1% vs. EFGe   Herfy reported 3Q2016 KPIs, with earnings up 4% Y-o-Y driven by decent top-line growth and coming broadly in line (-3%) with our numbers. Revenue was up 13% Y-o-Y and broadly in line (-1% vs. EFGe), driven by store openings, with Herfy opening 10 restaurants in the quarter (26 in 9M16), putting the company on track for a total of 30 new locations in 2016. We believe the quarter’s top-line growth was partly boosted by Ramadan timing differences (less days in 3Q this year), which is a weak month for fast food sales. Gross margin continued its contractionary trend since 4Q15, albeit at a lesser pace of c50bp Y-o-Y to 30.0% (lower than our 30.5% forecast), likely on higher store labour costs  and electricity and fuel expenses (post recent subsidy reforms). Accordingly, gross profit increased 11%  Y-o-Y (-3% vs. EFGe). EBIT margin was down c70bps Y-o-Y to 19.7%, but slightly ahead of our 19.5% forecast on lower-than-expected SG&A costs growth (+15% Y-o-Y; -7% vs. EFGe). Operating profit was thus up 9% Y-o-Y and broadly in line (-1% vs. EFGe).   A decent results set, overall, that offered no major surprises. We remain Buyers of Herfy, as we expect earnings growth to improve as revenue momentum accelerates, as newly-launched locations reach a more profitable point in the maturity cycle. (Earnings release, Hatem Alaa, Nada Amin)   Herfy: SAR63.00 as of 19 October 2016, Rating: Buy, FV: SAR86.00 per share, MCap: USD776mn, HERFY AB / 6002.SE