Back to top

Analyst Blog

Chinese medical devices major Mindray Medical International Limited (MR - Analyst Report) recently revealed the completion of its takeover of Wuhan Dragonbio Surgical Implant's orthopedics operation, in line with the terms of the definitive agreement inked on June 6, 2012.

Mindray continues to provide guidance on a full-year basis. The company forecasts sales growth in excess of 18% for 2012. It also expects adjusted net income for the year to increase a minimum of 13% year over year. The guidance does not take into account any tax advantage on account of key software enterprise status. The forecast for capital expenditure for 2012 is about $90 million.   

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 Mindray’s revenues. In fiscal 2011, the company launched 13 new products.

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 GE Healthcare, a part of General Electric (GE - Analyst Report), Philips (PHG - Analyst Report) and Siemens . Our Neutral recommendation is supported by a short-term Zacks #3 Rank (Hold).

Please login to Zacks.com or register to post a comment.