Reported net profit: EGP133mn, +309% Y-o-Y, -16% Q-o-Q, +22% vs. EFGe Revenue: EGP1539.3mn, +1% Y-o-Y, -1% Q-o-Q, -4% vs. EFGe Gross profit: EGP254mn, +61% Y-o-Y, +7% Q-o-Q, +41% vs. EFGe EBITDA (inc. rebate): EGP315.9mn, +57% Y-o-Y, +2% Q-o-Q, +28% vs. EFGe   Oriental Weavers (OW) 3Q16 reported earnings of EGP133mn, increasing four-folds Y-o-Y and 22% above our estimate. The main reason behind the earnings beat is the full consolidation of 9M numbers of OW Textiles in 3Q16. If we adjust to include only 3Q numbers, earnings would have been broadly in line with our estimate. Headline revenue growth remained sluggish (+1% Y-o-Y, -4% vs. EFGe) as local revenue growth offset weak export sales:    Local sales rose 15% Y-o-Y (+9% volumes aided by share gains due to limited import competition, +7% prices to pass on the impact of EGP devaluation last March). Own showroom (230+) sales rose 15% and represented c40% of local revenue. The company is raising prices in the local market to offset the impact of the recent EGP floatation Headline export revenue was down 10% Y-o-Y, but this was deflated by the consolidation of OW Textiles (9M reflected entirely in 3Q) that led to a decline in yarn exports (OWT buys them from OWI; booked as exports due to OWT’s free zone status). On an adjusted basis (excluding OWT), export revenue was flattish Y-o-Y with the US (+25%) remaining a key growth driver. Europe remains weak mainly due to 23% decline in revenues with a key European customer (but see potential for 50% increase in order size in 2017)   Headline gross margin widened c6.1pp Y-o-Y (c3.3pp Y-o-Y on an adjusted basis) on lower raw material costs (PP -20% Y-o-Y in 9M16); also EFCO shifted partially to 20% lower priced regenerated polyester fibers. We also believe the company has benefitted from devaluation due to its significant export exposure.   EBITDA (including rebate) increased 57% Y-o-Y, with the rebate increasing three-folds to EGP31mn as the company continued to collect for the period prior to December 2015. SG&A costs grew c12% Y-o-Y, likely to support local sales growth, in our view.   We remain buyers of the stock, which is a direct beneficiary of EGP devaluation, given its large export exposure (nearly half of sales). The company stated in its earnings release that it is not passing on devaluation benefits to export clients for now, signalling an improved competitive environment and a potentially very strong 2017e. (Earnings release, Hatem Alaa, Nada Amin)   Oriental Weavers: EGP9.84 as of 13 November 2016, Rating: Buy, FV: EGP11.30 per share, MCap: USD295 million, ORWE EY / ORWE.CA