Arrail Group’s second IPO bid passes hearings

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China: One of China’s top dental care providers, the Arrail Group filed for an IPO in Hong Kong – the second time following its failed attempt last year – and passed the listing hearings.

The healthcare provider operates its services from over 100 hospitals and clinics in 15 of the country’s largest cities. While the Arrail chain caters to the upmarket segment of the population, its Rytime brand is targeted at the middle-end of the market.

The two brands raked in revenues of 430 million yuan ($68 million) and 410 million yuan, respectively during the six-months ended September 2021. The Group’s dental services cover regular dental, orthodontic and dental implants treatment.

The Hong Kong IPO market has virtually come to a standstill following the Ukraine invasion on 24 February. Only seven firms have joined Hong Kong’s IPO listing in 2022. During the same period last year, 22 companies debuted in the Asian financial hub.

Arrail Group plans to issue 46,527,500 shares at HK$14.62 each. 4.65 million of the available share target Hong Kong investors. If there is substantial demand for the IPO, an overallotment option of up to 6.97 million shares can be further exercised. The raised funds raised from the IPO will be disbursed for business expansion, IT infrastructure upgrade and working capital, said the company.

According to the market data supplied by Arrail, China’s dental health market is poised to grow to approximately 300 billion yuan by 2025, from 119.9 billion yuan in 2020. This is due to a low penetration rate of 24 per cent. By comparison, dental penetration rate in the US stands at around 70 per cent. As such, the Beijing-headquartered company projects potential growth not only for basic dental services, but also for elective cosmetic and restorative services like teeth whitening and dental implants.