Arrail Group: Independent Investigation Delayed, Interim Results Release Postponed to Late April

DentalGoodNews｜March 2, 2026 - Arrail Group (06639.HK), a dental chain, announced that its independent investigation has not been completed as scheduled due to three major factors: loss of internal documents, limited time for employee interviews, and delays in external responses. Consequently, the release date for the interim results for the six months ended September 30, 2025, has been postponed again from the previously expected end of February 2026 to before the end of April 2026. The company's shares have been suspended from trading since December 1, 2025.

The announcement detailed the specific reasons for the delay in the independent investigation: the loss of certain internal documents within the Group, requiring the independent forensic accountants to spend additional time on alternative procedures and analysis; limited interview time with certain current employees due to their daily work schedules; and delays in receiving responses to certain inquiry letters sent to external parties.

Regarding the investigation progress, the independent forensic accountant, EY, has largely completed the retrieval and analysis of relevant bank statements and transaction records. They are currently conducting follow-up interviews and inquiry procedures. The independent investigation lawyer, DLA Piper, continues to provide legal advice to the Board's Independent Investigation Committee.

On the auditor front, PricewaterhouseCoopers resigned as the company's auditor on February 13, 2026. Crowe (HK) CPA Limited was appointed as the new auditor on February 14, 2026, and has commenced the review of the interim financial statements. The announcement disclosed that the reasons for PwC's resignation included a failure to reach a consensus on audit fees.

According to previous reports by DGN, Arrail Group's trading suspension since December 1, 2025, was triggered by PwC's request during the audit process for an independent investigation into approximately USD 11 million in loans and three repayments involving the company's founder and executive director, Zou Qifang, and related parties.

Arrail Group stated that aside from matters related to the independent investigation, the Group's business operations are proceeding as usual. The company previously issued a positive profit alert on November 19, 2025, forecasting a profit before income tax of no less than RMB 20 million for the first half of the 2026 fiscal year (the six months ended September 30, 2025).

Founded in 1999, Arrail Group operates two major brands, "Arrail Dental" and "Ruitai Dental," managing 118 dental clinics and hospitals with a total of 1,566 dental chairs across Mainland China and Hong Kong. It was listed on Hong Kong Exchanges and Clearing Limited (HKEX) in 2022. For the 2025 fiscal year, the company reported revenue of RMB 1.688 billion, a year-on-year decrease of 3.3%, and an operating profit of RMB 36 million, a year-on-year increase of 39.4%.