Cigarette prices has been officially risen across Egypt effective 08 September 2016, with retail prices for Eastern Company’s best-selling brands Cleopatra Golden King (c60-65% of sales volume of own brands) rising 17% to EGP10.5/pack and Cleopatra Box (c30-35%) +26% to EGP12.00. Top-selling foreign brands saw similar increases: L&M +19% to EGP19 and Marlboro +17% to EGP27. The decision comes before formal implementation of the new proposed tax brackets on 1 October 2016, given pre-emptive market-wide price increases by retailers who will see their margins increase in the process . We believe the early application means that Eastern Co. may lose a bit on ex-factory price temporarily (-18% on best-seller Cleopatra Golden King). Once the new brackets are confirmed and implemented, we see Eastern pocketing in EGP0.15/pack for Golden King (+8%) and EGP0.55 (+26%) for Cleopatra Box. The new ex-factory prices will roughly add c7% to our FY16/17e revenue (included for nine months only). Assuming the increase in revenue fully trickles down to earnings, this raises our FY16/17e bottom-line 20%+. However, we believe this will not be the case this time around, given mounting cost pressures from EGP devaluation and FX shortages. We reiterate our Buy rating on the name and will be revising our numbers to reflect the new prices. (Hatem Alaa, Nada Amin)   Eastern Company: EGP224.01 as of 08 September 2016, Rating: Buy, FV: EGP310.00 per share, MCap: USD1,261mn, EAST EY / EAST.CA