Arrail Group Ltd. (6639) AI Stock Analysis

• Market Cap: HK$1.23B
• Dividend Yield: N/A
• Average Volume (3M): 1.09M
• Price to Earnings (P/E): 44.2
• Beta (1Y): 1.12
• Revenue Growth: 7.58%
• EPS Growth: N/A
• Country: HK
• Employees: 3,296
• Sector: Healthcare
• Sector Strength: 58
• Industry: Medical - Care Facilities
• EPS (TTM): 0.02
• Shares Outstanding: 564,030,940
• 10 Day Avg. Volume: 1,028,420
• 30 Day Avg. Volume: 1,087,457
• PEG Ratio: 0.35
• Price to Book (P/B): 4.57
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 312.90
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: N/A
• Price Target Upside: N/A
• Rating Consensus: N/A
• Number of Analyst Covering: 0

• Rating: 63 Neutral
• Price Target: ―

Arrail Group Ltd. demonstrates strong financial performance with robust cash flow and improving profitability, which are the main drivers of its stock score. Technical indicators suggest a bearish trend, although the stock may be oversold. The valuation appears stretched, limiting immediate upside potential. Overall, while the financial fundamentals are solid, market sentiment and valuation concerns temper the outlook.

Arrail Group Ltd. Business Overview & Revenue Model

Company Description

Arrail Group Ltd. (6639) is a leading dental services provider based in China, specializing in high-quality dental care services. The company operates a network of dental clinics under two brands: Arrail Dental for premium services and Rytime Dental for affordable care. Arrail Group is committed to offering comprehensive dental solutions, including preventive, restorative, orthodontic, and aesthetic dental services, to meet diverse consumer needs.

How the Company Makes Money

Arrail Group Ltd. generates revenue primarily through the provision of dental services across its network of clinics. The company's key revenue streams include fees for dental consultations, treatments, and procedures offered under its Arrail Dental and Rytime Dental brands. Arrail Group benefits from its strategic positioning in the growing Chinese dental care market, leveraging its reputation for quality care and its extensive clinic network to attract a broad customer base. Additionally, partnerships with leading dental product suppliers and investment in cutting-edge dental technology contribute to its service offerings, enhancing customer satisfaction and loyalty, which in turn supports its revenue growth.

Arrail Group Ltd. Financial Statement Overview

Summary

Arrail Group Ltd. exhibits promising growth with improving profitability and strong cash flow generation. While financial stability is evident through a strong equity ratio, moderate leverage requires careful management. The company is on a positive trajectory but must continue enhancing profitability and managing debt to sustain growth.

Income Statement

Arrail Group Ltd. has shown strong revenue growth of 18.47% in the most recent year, signaling positive momentum. The gross profit margin improved to 22.49%, reflecting better cost management. However, the net profit margin is still low at 0.98%, indicating limited profitability. The turnaround in EBIT and EBITDA margins to 1.49% and 18.46%, respectively, from negative figures in prior years demonstrates improving operational efficiency.

Balance Sheet

The company has a healthy equity position with an equity ratio of 53.95%, denoting financial stability. However, the debt-to-equity ratio of 0.60 suggests moderate leverage which could pose risks if not managed carefully. The return on equity is modest at 0.98%, reflecting the need for enhanced profitability to generate better shareholder returns.

Cash Flow

Operating cash flow grew significantly, supporting a strong free cash flow growth rate of 686.08%. The operating cash flow to net income ratio of 16.12 demonstrates good cash generation relative to earnings. A solid free cash flow to net income ratio of 10.74 further underscores the company's capability to generate cash.

Breakdown
TTM	Mar 2024	Mar 2023	Mar 2022	Mar 2021	Mar 2020
Income Statement		Total Revenue
1.75B	1.75B	1.47B	1.62B	1.52B	1.10B
	Gross Profit
364.84M	392.68M	247.08M	336.56M	364.42M	111.39M
	EBIT
4.61M	26.00M	-193.59M	-38.55M	126.19M	-133.44M
	EBITDA
93.34M	322.35M	87.85M	42.10M	207.44M	-32.35M
	Net Income Common Stockholders
20.83M	17.16M	-219.91M	-701.03M	-599.42M	-316.85M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
997.94M	1.10B	937.53M	1.26B	727.31M	249.72M
	Total Assets
3.13B	3.25B	3.06B	2.99B	2.35B	1.90B
	Total Debt
1.05B	1.05B	955.68M	890.67M	1.03B	945.14M
	Net Debt
432.63M	396.46M	333.82M	-161.61M	356.30M	772.53M
	Total Liabilities
1.39B	1.42B	1.37B	1.38B	4.81B	3.93B
	Stockholders Equity
1.67B	1.76B	1.61B	1.56B	-2.50B	-2.06B
Cash Flow		Free Cash Flow
172.32M	184.21M	23.50M	108.63M	213.50M	95.11M
	Operating Cash Flow
217.17M	276.65M	131.66M	224.28M	242.87M	154.29M
	Investing Cash Flow
74.11M	-176.00M	-342.44M	-203.94M	61.75M	-109.59M
	Financing Cash Flow
-274.06M	-106.96M	-280.35M	380.86M	217.51M	-43.85M

Arrail Group Ltd. Technical Analysis

• Technical Analysis Sentiment: Neutral
• Last Price: 2.18
• 50DMA: Positive
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For HK:6639, the sentiment is Neutral. The current price of 2.18 is below the 20-day moving average (MA) of 2.20, above the 50-day MA of 2.08, and below the 200-day MA of 2.75, indicating a neutral trend. The MACD of 0.02 indicates Positive momentum. The RSI at 51.26 is Neutral, neither overbought nor oversold. The STOCH value of 53.78 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for HK:6639.

Arrail Group Ltd. Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
3613	68 Neutral	$7.26B	14.51	12.58%	4.04%	5.69%	-7.43%
2138	66 Neutral	HK$746.68M	21.00	0.66%	1.59%	169.20%	―
6639	63 Neutral	HK$1.23B	44.22	1.22%	―	7.58%	―
1419	58 Neutral	HK$315.03M	15.01	2.73%	3.37%	-0.69%	―
Sector *	54 Neutral	$5.37B	3.26	-45.10%	3.30%	16.81%	0.02%
1833	51 Neutral	$16.79B	96.28	0.96%	―	1.01%	―