Mindray Medical International Limited (MR - Analyst Report), a leading Chinese medical device manufacturer, recently revealed certain unaudited early results for 2011. In addition, the company issued net sales guidance for 2012.
Mindray forecasts net revenues of about $878 million for the year ended December 31, 2011, up approximately 24.7%. The company anticipates adjusted net income to rise at least 10% year over year. Adjusted net income assumes a corporate income tax rate of 15% for the Shenzhen unit.
Mindray was pleased to generate robust double-digit sales growth for fiscal 2011 despite the difficult global macro economic situation. Sales were buoyant in China on account of positive hospital and government spending patterns. Emerging markets (outside China) were a key growth driver and the company captured market share in developed nations.
The company released as many as 13 new products in 2011. It engaged in 4 new acquisitions during the year.
For 2012, Mindray expects its sales to increase not less than 18% year of year. The company will provide a detailed guidance for 2012 with its 2011 financial results.
Mindray is a bellwether in the Chinese MedTech industry with a solid international presence. A key distinction with domestic competitors is that the majority of Mindray’s products have CE Mark and/or Food and Drug Administration (“FDA”) clearance.
Mindray maintains a decent product pipeline and brings out several new products each year. New products contribute in a major way to its revenues.
The company has entered the premium segment globally, where its competitive advantage is still unclear. Also, on the negative side, health care reform, in China and the U.S., may reduce demand for Mindray’s products. Competition is fierce and leads to price erosion over time.
Mindray’s competitors, in different niche segments, include General Electric (GE - Analyst Report), Philips (PHG - Analyst Report) and Siemens . Our Neutral recommendation is supported by a short-term Zacks #3 Rank (Hold).