Mindray to Attend Medical Fair

Mindray Medical International Limited (MR - Analyst Report), a leading Chinese medical device manufacturer, recently revealed its intended participation in the 67th China International Medical Equipment Fair ("CMEF"). The event will take place between April 17, 2012 and April 20, 2012 in Shenzhen, China.

The company will showcase over 90 offerings from its three business lines. The broad segments are medical imaging, patient monitoring and life support as well as in-vitro diagnostic. Included among the exhibits are three latest offerings from the company, namely, the SynoVent E5 and E3 ventilators, the BS-2000 biochemistry analyzer and the DC-8 ultrasound system.

Mindray is a bellwether for the Chinese medical devices industry. The company has a large domestic sales infrastructure, which gives it better access to medium-sized county hospitals. In China, it beats other multinationals on price and defeats local players, who have cheaper products, on brand recognition.

In western markets, the company targets mid-market, price-sensitive customers. A key distinction with domestic competitors is that the majority of Mindray’s products have CE Mark and/or FDA clearance.

Mindray has a solid product pipeline. The company introduces about 10 new products each year. In fiscal 2011, it launched as many as 13 new products. New products contribute in a major way to the company’s revenues. The client base of the company is widely dispersed on a net revenues basis and is marked by low client concentration.

The medical device industry is characterized by quick product development, rapid technological advances, intense competition and a strong emphasis on proprietary products. The company has entered the premium segment globally where its competitive advantage is still evolving. Healthcare reform, in both 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 (SI - Analyst Report), among a host of other players. Our recommendation is supported by a short-term Zacks #3 Rank (Hold).