FAST NEWS: Dental Group Arrail’s Losses Widen on Soaring Administrative Costs

The latest: Chinese private oral healthcare provider Arrail Group Limited (6639.HK) announced its first post-listing results on Monday, reporting a net loss of 701 million yuan ($104 million) for the year ended March, with no final dividend paid.

Looking up: Though the company’s business was affected by recurring Covid-19 virus outbreaks during the reporting period, its revenue still grew by 7.2% to 1.62 billion yuan, mainly due to the steady increase in attendance at its clinics and hospitals.

Take Note: The company’s administrative expenses for the period jumped 112% to 276 million yuan due to 95 million yuan in expenses incurred for the issuance of share-based compensation to employees and 42.5 million in listing fees, which was the main reason for the widening loss.

Digging Deeper: Arrail Group is a mid-to-high-end dental services provider, operating 112 hospitals and clinics in 15 major first- and second-tier cities in China as of the end of March this year. The company operates under a dual brand, targeting affluent patients with high purchasing power in first-tier cities and middle-class consumers in first- and second-tier cities, respectively. The company was successfully listed on the Hong Kong stock market in March this year, but its business was adversely affected by the impact of the Covid-19 epidemic, which temporarily closed 34 clinics and hospitals for one to 102 days in the last fiscal year, and the postponement of oral treatment plans by many patients.

Market Reaction: Arrail Group’s share price rose on Tuesday, closing up 3.4% to HK$12.16 at the midday break, but still 16.8% below its IPO price of HK$14.62.

Translation by Jony Ho

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