4Q15 results highlights (Y-o-Y is based on 4Q14 adjusted figures): i) recurring pre-tax & minority net income – EGP100mn, -12% Y-o-Y, 0% Q-o-Q, +3% vs. EFGe; ii) EBIT (inc. rebate) – EGP196mn -13% Y-o-Y, -3% Q-o-Q, -6% vs. EFGe; iii) revenue – EGP1,374mn, -6% Y-o-Y, -10% Q-o-Q, -10% vs. EFGe   Summary: We are positive on the results, especially given the gross margin momentum. We remain buyers of Oriental Weavers (OW) given the company’s position as a net beneficiary of devaluation as well as expected improvement in export-rebate collection (and added incentives for higher export growth), which has been a key hindrance to earnings growth momentum over the past year. Also the stock trades at an attractive 2016e P/E of 7x.   OW reported earnings of EGP63.5mn in 4Q2015 up 8% Y-o-Y (+95% Q-o-Q). Recurring earnings before taxes and minority (adjusted mainly for FX & investment gains and losses; we use pre-tax and minority figures given distortions to minority interest on one-offs at 58%-owned subsidiary MAC in 3Q2015) fell 12% Y-o-Y and came broadly in line with our forecast (+3%) as gross margin gains mainly from the polypropylene (PP) price correction were offset by lower export rebates Y-o-Y. All Y-o-Y comparisons in our comment are based on adjusted 4Q2014 figures due to temporary deconsolidation of Modern EFCO then.   Revenue fell 6% Y-o-Y (-10% vs. EFGe, reported figure +4%) as local revenue rose 5% Y-o-Y bolstered by continued growth in the company’s number of showrooms (added 9 new showrooms in 2015) while export sales fell 14% Y-o-Y on a 20% drop in volumes in the quarter (most likely to Europe, c50% of exports) on a highly competitive environment and post a contract change with a major client.     Adjusted gross profit (including depreciation) growth was 6% Y-o-Y with GM expanding c110bps Y-o-Y to 9.8% as the easing in key input cost prices (PP) finally began to materialise after muted margin expansion for a number of quarters. Margins were also supported by improvements to operational efficiency and cost-cutting initiatives.   Adjusted EBIT (including rebate) fell 13% Y-o-Y as the export rebate fell 48%, albeit showing a nearly threefold Q-o-Q improvement as the company began collecting delayed payments after the government reinstated the old rebate system (a new decree was passed in January 2016 cancelling the July 2014 export subsidy programme where companies will now return to receiving c6% of the export bill in rebates after being unable to collect rebates since July 2014). SG&A expense trends remained fairly in line with revenue down 4% Y-o-Y. Accordingly, EBIT margin contracted 60bps Y-o-Y to 8.3% on the lower rebate.   Below the EBIT level it booked a number of one-offs including FX losses of EGP3.3mn (vs. EGP7.0mn in 4Q2014), and other income of EGP0.8mn (versus EGP27mn in AFS gains) as well as provisions of EGP15mn (versus cEGP21mn). (Company, Nada S. Amin, Hatem Alaa, CFA  Oriental Weavers: EGP7.21 as of 13 March 2016, Rating: Buy, FV: EGP14.50 per share, MCap: USD414 million, ORWE EY / ORWE.CA