Dental services group Arrail to consider Hong Kong listing as it prepares for US$5b expansion
Arrail Group says it will only list in Hong Kong if it can qualify for a dual class share structure
Arrail Group, one of China’s largest dental services providers, faces a dilemma on whether to list shares in Hong Kong or New York.
In the eyes of founder and chairman Robert Zou Qifang, Hong Kong’s geographical and cultural proximity to the mainland is a clear advantage, but the ban on dual-class shares structure for non-technology firms listed in the city is a major stumbling block.
“Hong Kong’s biggest advantage is its proximity and good investor understanding of the mainland market,” he told the South China Morning Post on the sidelines of the JP Morgan Healthcare conference in San Francisco.
“The United States’ financial market is more mature where investors have a better understanding of growth industries.”
After raising US$200 million via four rounds of private share placements since 2010, Zou believes the company is almost ready to go public.
The company operates 10 dental clinics in Beijing, and 91 in total across the country, employing 645 dentists. About 30 additional dental clinics are planned to open this year. Zou says he has a target of 1,000 clinics nationwide within the next eight years. The expansion will require 5 billion yuan (US$774.04 million) over seven years to 2025.
