Revenue – EGP435mn, +45% Y-o-Y, +133% Q-o-Q, +98% vs. EFGe Gross profit – EGP155mn, +34% Y-o-Y, +101% Q-o-Q   Net profit – EGP97mn, +38% Y-o-Y, +90% Q-o-Q, 110% vs. EFGe Net contracted sales – EGP1.2bn, +93% Y-o-Y, +78% Q-o-Q, +20% vs. EFGe   Sodic has reported its financial and operational results for 2Q16. Net contracted sales surprised positively, coming in at EGP1.2bn in 2Q, showing the strongest Y-o-Y (+93%) and Q-o-Q (+78%) growth and the only beat (+20%) to our estimate amongst its peers. Other operating metrics indicate maintained strength, including collections and deliveries. Moreover, reported numbers beat our expectations with significant margins, driven by higher-than-expected deliveries across the company’s projects and with the commencement of deliveries at Eastown. Gross margins were slightly down, but continue to be at adequate levels (GPM: 36%).   Main positives   Strong net contracted sales, totalling EGP1.2bn (+92% Y-o-Y, +78% Q-o-Q, +20% vs. EFGe), on the back of busy launches during the quarter, including a phase in Villette, Eastown, Courtyards and Forty West. Sales in East Cairo contributed c60% of total sales, Sodic West c34% and Caesar the remaining c6%. 1H16 net contracted sales totalled EGP1.87bn (-11% Y-o-Y) Cash collections continued to grow (EGP692mn in 2Q16, +18.7% Y-o-Y, +4.5% Y-o-Y) Strong reported numbers on stronger-than-expected deliveries; number of units delivered in 2Q16: 201, 2Q15: 166, 1Q16: 101. Deliveries in the first phase of Eastown started in May, with c75 units in 2Q16     Main negatives Lower gross profit margins, which we believe may have come on the back of the delivery of the first batch at Eastown, which were sold at a relatively lower margin Cancellation rate was at 7%, which management attributed to the cancellation of one large unit at Caesar (representing c17% of total)      We expect Sodic to continue to outperform its peers and highlight the announcement of the following as positive stock triggers: i) strong contracted sales numbers in 2H16, given the busy pipeline of launches; ii) acquisition of new land plots; iii) launch of co-development project with Heliopolis Housing (expected in early 2017); and iv) an EGP devaluation exercise that would attract foreign flows into the name, in line with the March 2016 scenario. (Company disclosure, Mai Attia, Sara Boutros)   SODIC: EGP13.96 as of 15 August 2016, Rating: Buy, FV: EGP15.20 per share, MCap: USD533mn, OCDI EY / OCDI.CA