• Founded in 1991 in Shenzhen, China. It is headquartered in Shenzhen, China. Its US operations is headquartered in New Jersey.
• Mindray Medical (NYSE:MR) acquired Datascope's patient monitoring division in May 2008 - allows Mindray Medical to access more direct sales channels in the US, UK and France. This division is located in Mahwah, New Jersey.
• Mindray Medical (NYSE:MR) plans to market products that will extend its value chain to get closer to end users, with 29 branch companies in China, 12 branches overseas.
• A leader in China in development, marketing and manufacture of medical equipment
• Aims to introduce 6-8 new products each year to broaden its market share in target market segments
• Invests 10% of revenues in R&D each year, takes advantage of China's low R&D cost base
• Mindray Medical's advantage is its low internal cost structure and dedicated R&D team.
• R&D staff comprises of over 1500 engineers, based mainly in China and a small presence in the US. They aim not only to better meet customer needs, but to lower cost to its existing product portfolio.
• R&D located in Shenzhen, Nanjing, Beijing, Mahwah, Seattle, Stockholm
• Offers 70 products across three business segments - patient monitoring and life support products; in-vitro diagnostic instruments and medical imaging systems
• In 2009, it introduced 10 new products. In 2010, it plans to introduce 7-10 products, with a focus on the high-end customer market segments.
• Distribution channels: In China, Mindray Medical supplies to hospitals, clinics, healthcare facilities. Worldwide, it supplies to 190 countries.
Revenue / earnings outlook
• Revenue and earnings have grown dramatically in since 2007. In 2007, revenues rose 57.5% and net income increased 74.9%. In 2008, revenues rose 79% and net income increased 34%.
• In 2000, Mindray Medical (NYSE:MR) began to export. In 2007, export revenue exceeded domestic revenue for the first time.
• Mindray Medical (NYSE:MR) says that its non-GAAP earnings-per-share for 2009 to be $1.29 or more.
• Mindray Medical (NYSE:MR) expects its 2009 revenue to increase year-on-year by 14%-16% from 2008 figures. Mindray expects its revenue for 2009 to range between US$624 million and US $633 million. Revenue for 2008 was US$547 million.
• Part of Mindray Medical's growth in revenue and earnings is due to the Chinese government's focus on healthcare.
• The Chinese government's RMB850 billion healthcare reform proposal over three years will assist in the sustained growth of the Chinese healthcare industry, and high growth in Mindray Medical in the domestic market.
• The Chinese market is the largest revenue market for Mindray Medical, comprising 42.8% total revenue in 2008. China, Europe and North America comprise of 77.5% of total revenue.
• Threat to revenue and earnings reside mainly in hospital expenditure. In the economic crisis of 2008, critical factors to Mindray's success were shown to be hospitals' spending, reimbursement and financing. These factors are directly affected by credit availability, which leads directly to the volume of hospital procedures and hospital revenue.
• The resource allocation decision of hospitals revolve around cost and routine patient needs, which are the foci of Mindray Medical's R&D.
• Mindray Medical's products are generally considered to be hospital essentials, with patient monitoring and life support products comprising 44.5% of total revenue.
Cash flow / cash
• Operating cash generation has been strong over the past two years.
• In 2007, Mindray Medical (NYSE:MR) held RMB 1379M in cash and cash equivalents
• In 2006, it had RMB 1710M in cash and cash equivalents.
• Mindray Medical (NYSE:MR) has high working capital with RMB 1730M in 2007 and RMB 1631M in 2006.
• It does not rely heavily on debt for its operations, which includes R&D.
Competitor / industry
• Mindray Medical's main competitors in the Medical Instruments and Supplies industry are Abbott Laboratories (NYSE:ABT), Bayer Healthcare AG and GE Healthcare.
• Mindray Medical's market cap stands at US $4.09B
• Abbott Laboratories' market cap stands at US $85.83B
• In 2008, the Medical Instruments and Supplies Industry suffered in the economic crisis .
• The effect of the crisis was exacerbated by uncertainty in healthcare reform, proposed reimbursement reductions and low operating margins.
• For profit hospitals rely heavily on leverage for its operations.
• The crisis in 2008 and subsequent lack of spending on hospital supplies provides a solid backdrop for a pick-up in equipment and supplies expenditure.
• Hospitals are severely depleted in supplies due to drastic cuts in spending, and dated equipment is due for an upgrade.
• Another catalyst for improved industry conditions is the overall rebound in macro-economic conditions. Improved economics conditions leads directly to the number of uninsured individuals to drop. This leads to a higher number of insured patients, and higher overall hospital spend.