Revenue – SAR910mn, +4% Y-o-Y, +34% Q-o-Q, -4% vs. EFGe Gross profit – SAR212mn, +107% Y-o-Y, +152% Q-o-Q, +2% vs. EFGe Operating income* – SAR134mn, +982% Y-o-Y, +459% Q-o-Q, -2% vs. EFGe Net income – SAR52mn, +101% Y-o-Y, vs loss of SAR59mn in 3Q16, +20% vs. EFGe   Sipchem reported its 4Q16 results with earnings recovering back into positive territory (3Q16 losses were SAR59mn) on the back of higher volumes and prices this quarter. Bottom line earnings came in at SAR52mn, 20% above our forecast and broadly in line with Bloomberg consensus forecasts (+5%). The beat versus our numbers was mainly driven by higher-than-expected interest income (we estimate interest income was cSAR10-11mn while we had assumed a marginal amount of SAR3mn), with operational numbers in line with our forecasts.   The main drivers behind the substantial improvement Q-o-Q were i) better pricing, especially for methanol (+28%) and EVA/LDPE (+8%) with VAM the only product not to see a substantial improvement; ii) volumes improved substantially both Y-o-Y (+27%) and Q-o-Q, according to the release, and iii) base effect as there was a shutdown during 3Q16 that impacted volumes and costs.      Overall, a solid set of numbers with no major surprises. We expect 1Q17 earnings to be even better as methanol and EVA prices have continued to rally and as around 50% of Sipchem’s sales are done through quarterly contracts, which typically lag spot markets’ pricing, so the improvement in prices has yet to be fully reflected in the company’s numbers. While we think Sipchem could be a good tactical play in the short term, from a fundamental perspective we believe the stock is fully valued especially as we expect methanol and derivative prices to cool down after 1Q.      *Note that operating income for 4Q15 was adjusted by the company due to some reclassification of provisions for future projects and research costs from below EBIT to above the EBIT line. (Company disclosure, Yousef Husseini)   Sipchem: SAR17.92 as of 18 Jan 2017, Rating: Neutral, TP: SAR14.0/share, MCap: USD1,752mn, SIPCHEM AB / 2310.SE