Reuters conducted a detailed interview with Mohamed El Damaty, Domty’s Deputy Managing Director. Most of the comments offer nothing new. The key takeaway, however, is difficulty in applying planned white cheese price increases and an allusion to potentially weak 2Q16 results. Below are the key points from the interview :   The company will spend EGP240mn (USD27.03mn) in capex over 2016-17e to increase capacities of existing products and start production of baked goods (cheese sandwich planned before end-2016) and yellow ‘hard’ cheese (by 1Q17), as well as distribution investments (targeting fleet to reach 1,100 trucks by 2017 from 700 currently). Capex will be funded from IPO proceeds (cEGP300mn re-injected in the company) and internal resources. This is broadly in line with our estimate of cEGP249mn in capex over 2016-17e   White cheese capacity is currently at 175k tonnes per annum (tpa) and will reach 215k tpa by year-end. This is also broadly in line with our 219k tpa 2016-end estimate   The company’s new plant (26k sqm in Sixth of October city) will be inaugurated in about a month and will boost juice capacity to 100k tpa from 65k tpa (in line); this will help increase juice market share to 9-10% (from c7% in 2015; dropped to c6% in 1Q16, but has been recovering since). The second factory will be responsible primarily for juice production, as well as most new products   2Q16 was likely weak on slow Ramadan sales as it was affected by accelerated phase-out of agents (targeting to bring them down to c20% of sales from c30%) to facilitate applying price increases; however, the company expects a stronger 2H16. We believe the company could make up for a slow 1H16 in the second half of the year as it is seasonally stronger (summer, back-to-school season)   Domty was looking to increase white cheese prices c11% gradually over 2Q16, but only managed to raise prices c4%; the company is looking to further up prices c10% over 2H16. We believe this is largely due to the reliance on agents, which prompted the company to accelerate their phase-out as mentioned above. (Reuters interview, Hatem Alaa, Nada Amin)   Domty: EGP8.25 as of 19 July 2016, Rating: Buy, FV: EGP12.65 per share, MCap: USD263mn, DOMT EY / DOMT.CA