Mindray's Prelim Results Impress - Analyst Blog

Leading Chinese medical devices maker Mindray Medical International Limited (MR) has announced selected preliminary results for fiscal 2010. The Shenzhen-based company expects its revenues for the year to grow 10% year over year to roughly $703 million.

Moreover, the company estimates adjusted net income for fiscal 2010 to increase roughly 10% year over year. The adjusted profit excludes the $8.6 million corporate income tax reduction recognized in first-quarter 2010. Moving forward, the company expects at least 16% growth in its top-line for fiscal 2011.

Mindray also provided an update on its R&D achievements in fiscal 2010 and pipeline strategy for 2011. The company stated that it has met its product development goals for 2010 having launched 10 new products during the year, 5 of which came from its patient monitoring and life support product line (including two V series patient monitoring systems). The company launched 3 products in its medical imaging division including the M7 ultrasound system.

Mindray's sustained R&D commitment to provide clinicians with the latest technology for enhancing patient care remains intriguing. For 2011, the company plans to beef up product innovation by lifting its R&D investment.

The company aims to introduce 7-10 new products during the new year with areas of product expansion include patient monitoring, defibrillator, anesthesia delivery and blood analysis. Expected among the product launches are the hematology analyzer “BC-6800” and low-end black and white ultrasound systems.

Mindray is a global Chinese medical devices company operating through three segments. The company's products hold a roughly 40% share of the Chinese healthcare market. Besides China, Mindray operates in North America, Europe and other Asian countries. The company competes with global devices manufacturers such as General Electric (GE), Philips (PHG) and Siemens (SI).

Mindray has a strong position in the low and mid segments of the medical devices market in China and is poised to benefit from the solid fundamentals of the Chinese health care sector. Its new product development initiatives, expanding international footprint (and revenues) and solid sales infrastructure remain encouraging.

Although Mindray's strength is currently in the low and mid-end segments, the company is looking to carve a niche in the high-end markets. Moreover, Mindray is well positioned to benefit from the health care reforms in China. However, the company is exposed to intense competition-driven pricing pressure.   

 
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