Revenue – KWD182mn, -4% Y-o-Y, +4% Q-o-Q, +4% vs. EFGe EBITDA margin – 35.9%, -1.9pp Y-o-Y, +2.3pp Q-o-Q, +1.9pp vs. EFGe Net income – KWD12.9mn, -3% Y-o-Y, +42% Q-o-Q, +36% vs. EFGe   Ooredoo Kuwait released a surprising set of 3Q16 results, with earnings coming in at KWD12.9mn, well ahead of our estimate of KWD9.5mn. The beat was largely driven by better-than-expected margins, as EBITDA stood at KWD65.3mn (+10% vs. EFGe), with the reported EBITDA margin continuing to recover to 35.9% vs. our estimate of 33.9%. Group revenue totalled KWD182mn, broadly in line with our estimate, but we see a notable performance at the level of: i) the Algerian operation (+8% vs. EFGe); and to a lesser extent ii) the Tunisian operation (+5% vs. EFGe); both were likely driven by strong 4G data revenue, we suspect. Kuwait’s top-line, contrariwise, came in a mild 4% below our estimate and declined 3% Q-o-Q; this is the first quarterly decline in the past eight quarters, possibly due to seasonality and to an intensifying competitive environment, which is the main threat to the unit’s turnaround, in our view. Tunisia’s revenue continued to grow and its margin reached a high 43.7% despite a deteriorating macro-economic environment due to low tourism; this was likely due to a higher contribution from data revenue. Both Palestine and Maldives saw their aggregate revenues grow 8% Q-o-Q (+6% Palestine and +9% Maldives).   Overall, we see this as a good set of numbers. While the decline in Kuwait’s top-line raises some concern, it might turn out to be explicable by a seasonality effect (weak usage in the summer period) rather than competition; we will seek more colour from Ooredoo Group’s conference call. That said, the unit has picked up, breaking the 30% mark, following two quarters of a rather weak performance. We continue to be buyers of Ooredoo Kuwait on compelling valuations; the stock is trading at a FY16e EV/EBITDA of 3.4x vs. our MENA telecoms coverage average of 5.4x, implying a 37% discount. Moreover, Ooredoo Kuwait, offers one of the highest dividend yields across our coverage (8.5%). (Earnings disclosure, Omar Maher, Karim Riad)   Ooredoo Kuwait: KWD1.06 as of 24 October 2016, Rating: Buy, FV: KWD1.60 per share, MCap: USD1,781mn, OOREDOO KK / OORE.KW