Revenue – SAR3.95 bn, +15% Y-o-Y, +2% Q-o-Q, -1% vs EFGe Gross Profit – SAR1,004 mn, +253% Y-o-Y, +9% Q-o-Q, -4% vs EFGe Operating Income – SAR612 mn, versus loss of SAR742 mn in 4Q2015, +38% Q-o-Q, +18% vs EFGe Net Income – SAR123 mn, versus loss of SAR687 mn in 4Q2015, +1% Q-o-Q, +21% vs EFGe   Tasnee has just announced its 4Q2016 results showing a flattish bottom line performance Q-o-Q (+1%) but a significant improvement on the EBIT level (+38 % Q-o-Q) mainly as S,G&A costs appear to have dropped substantially. EBIT and Net income beat our forecasts by 18% and 21%, respectively, and we believe lower-than-expected S,G&A costs were the main factor (gross profit was actually slightly lower than our forecast), with the company noting in the release that general and administrative expenses were lower this quarter. Earnings also beat consensus forecasts of SAR114.5 mn by 13%. Note that the reason that the surge in EBIT Q-o-Q did not translate to the bottom line is base effect, as the previous quarter included SAR113 mn in one-offs from other income.   On the gross profit level, earnings saw a moderate improvement of 9% Q-o-Q and were broadly in line with our forecast (-4%). The better gross profit was mainly a function of better prices (TiO2 +3-4%, LDPE +8%, PP +3%, Acrylates +15-20%) and higher volumes (according to the release), although both PE and PP spreads were weaker this quarter, which should have partially offset the gains from the better pricing and volumes.   It has now been four consecutive quarters of improved earnings for Tasnee as the company’s cost cutting programme and a recovery in commodity prices has helped it turn around its operations. We are particularly encouraged by what appears to be a large drop in S,G&A, as we have previously argued that S,G&A costs at the company remain too high. We will review our forecasts once full financials are available to account for the improvement in S,G&A although our forecasts already assume a 5pp decline in S,G&A to revenues over our forecast horizon. We maintain our Neutral rating as we think the stock is fully valued at current levels. (company, Yousef Husseini)   National Industrialization Company: SAR16.66 as of 17 January 2017, Rating: Neutral, TP: SAR14.50 per share, MCap: USD2,972mn, NIC AB / 2060.SE