FAST NEWS: Arrail Group swings to black on post-Covid rebound

The latest: Oral healthcare provider Arrail Group Ltd. (6639.HK) on Tuesday reported a net profit of 4.98 million yuan ($714,000) in the six months through September, the first half of its fiscal year, reversing a loss of 88.6 million yuan in the same period a year earlier.

Looking up: The company’s revenue increased by 14.9% to 886 million yuan in the sixth-month period, as patient visits increased after China lifted its Covid restrictions at the end of last year.

Take Note: Its cost of sales increased by 13.1% to 683 million yuan, mainly due to higher employee benefit expenses, dental materials and property management expenses in line with business growth.

Digging Deeper: Arrail is a mid- to high-end dental services provider, operating 123 hospitals and clinics in 15 first- and second-tier cities in China at the end of September. The company operates under a dual brand, targeting affluent patients in first-tier cities and middle-class consumers in first- and second-tier cities. The company listed in Hong Kong last year, but at that time its business was adversely affected by the pandemic, which temporarily closed many of its clinics and hospitals. As a result, the company has reported combined losses of more than 1.5 billion yuan over the past three years.

Market Reaction: Arrail’s shares rose on Wednesday, closing up 1% to HK$7.81 by the midday break, near the lower end of its 52-week range.

Translation by A. Au

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