Net income – SAR72mn, +34% Y-o-Y, +44% Q-o-Q, + 12% vs. EFGe Revenue- SAR353mn, +36% Y-o-Y, +25% Q-o-Q, +12% vs. EFGe Gross profit – SAR163mn, +43% Y-o-Y, +30% Q-o-Q,  +2% vs. EFGe Net operating profit – SAR81mn, +33% Y-o-Y, +41% Q-o-Q, +11%  vs. EFGe   Mouwasat reported its preliminary 4Q16 results, posting robust earnings growth of 34% Y-o-Y to SAR72mn (12% above  our estimate). The earnings growth was led by strong operational performance as revenue grew a solid 36% Y-o-Y to SAR353mn driven by the ramp up in occupancy rates at Riyadh hospital (opened in 2015), expanding operations at specialised clinics, and achieving better operational efficiency at other hospitals. Other income of SAR3mn (including a capital gain of cSAR1mn on one of the assets) also supported earnings growth. Its Q-o-Q performance was even stronger, earnings went-up +44% Y-o-Y, which was driven partly by seasonality (holidays in 3Q).   Gross profit jumped 43% Y-o-Y as the GPM expanded 2pp to 46%. Savings in COGS/sales were offset by higher SG&A expenses; hence, EBIT grew 33% Y-o-Y and the EBIT margin was broadly stable at 23%. The increase in SG&A expenses is likely attributable to higher overheads associated with the 114-bed expansion in Jubail hospital that commenced operations in May 2016 (adding 13% to the company’s operational capacity); the company announced that it had sourced the medical and administrative staff needed, while occupancy ramp-up is likely not yet in place. (Company disclosure, Tarek El-Shawarby, Adham El Badrawy)   Mouwasat Medical Services: SAR144.94 as of 18 Jan 2017, Rating: Buy, TP: SAR151.50 per share, MCap: USD1,933mn, MOUWASAT AB / 4002.SE