Mindray Gets OK for Two More Devices
by Richard Daverman, PhD
ChinaBio Today
A Recent IPO, Mindray Keeps Climbing
Mindray Medical (MR) of China announced it received 510(k) clearance for two additional medical devices, bringing the total number of products available in the US up to ten. Worldwide, the Shenzhen-based company has over 40 medical devices on the market. In the first quarter, more than half of Mindray’s revenues came from international sales, while the rest are in its home market. The rate of growth was a stunning 60% for international sales and 13% domestically.
The new approvals are for the BC-3200, an automatic three-part differential hematology analyzer, and Hypervisor VI, a central monitoring system. The BC-3200 is the first automatic diagnostic laboratory instrument that was designed specifically for the US. Because it offers better performance than competitors at the same price point, it is aimed at cost-sensitive healthcare facilities and small labs.
The Hypervisor VI central monitoring system connects up to 32 bedside patient monitors, making it possible to watch multiple patients from a single location and to connect with the hospital’s central record system. It hooks up to Mindray’s existing individual patient monitoring devices.
Mindray promises that more of its diagnostic instruments will hit the US market in the next 18 months. Mindray operates in three divisions: patient monitoring devices (39% of revenue), diagnostic laboratory instruments (32% of revenue), and ultrasound imaging systems (28% of revenue).
Mindray made its IPO on the NYSE in September of 2006. Originally targeting a price of $10-$12, the company priced above that level at $13.50 and began trading at $16. Nine months later, it is trading for almost $29 per share. Insiders continue to hold 65% of the shares outstanding, and so far, holding on to those shares has proved to be a profitable decision.
In the most recent 12 months, Mindray had net earnings of $54 million on revenues of $212 million, for an almost pharmaceutical-level profit margin of 24%. First quarter revenues were up 25% and profits climbed 49%.
Because investors notice when a company is growing at these levels, Mindray is not cheap, unfortunately. It has a market cap of $3 billion (on $212 million of revenue) and a Price/Earnings ratio of 55. Even the P/E/Growth ratio is 1.46.
But Mindray finds itself in perhaps the sweetest of sweet spots: it is a low-cost provider of machines that provide more efficient healthcare. Given the low cost of manufacturing in China, a healthy R&D budget, excellent penetration of the growing Chinese market, and a good reputation outside of China (and skyrocketing sales) – what’s not to like?
RELATED READING:
- Biosimilars and China
- China's Recent Chanes in Health Policy a Pre-Olympics Tactic
ChinaBioToday.com is a regular contributor to BioHealthInvestor.com
_________________
ChinaBio Today
A Recent IPO, Mindray Keeps Climbing
Mindray Medical (MR) of China announced it received 510(k) clearance for two additional medical devices, bringing the total number of products available in the US up to ten. Worldwide, the Shenzhen-based company has over 40 medical devices on the market. In the first quarter, more than half of Mindray’s revenues came from international sales, while the rest are in its home market. The rate of growth was a stunning 60% for international sales and 13% domestically.
The new approvals are for the BC-3200, an automatic three-part differential hematology analyzer, and Hypervisor VI, a central monitoring system. The BC-3200 is the first automatic diagnostic laboratory instrument that was designed specifically for the US. Because it offers better performance than competitors at the same price point, it is aimed at cost-sensitive healthcare facilities and small labs.
The Hypervisor VI central monitoring system connects up to 32 bedside patient monitors, making it possible to watch multiple patients from a single location and to connect with the hospital’s central record system. It hooks up to Mindray’s existing individual patient monitoring devices.
Mindray promises that more of its diagnostic instruments will hit the US market in the next 18 months. Mindray operates in three divisions: patient monitoring devices (39% of revenue), diagnostic laboratory instruments (32% of revenue), and ultrasound imaging systems (28% of revenue).
Mindray made its IPO on the NYSE in September of 2006. Originally targeting a price of $10-$12, the company priced above that level at $13.50 and began trading at $16. Nine months later, it is trading for almost $29 per share. Insiders continue to hold 65% of the shares outstanding, and so far, holding on to those shares has proved to be a profitable decision.
In the most recent 12 months, Mindray had net earnings of $54 million on revenues of $212 million, for an almost pharmaceutical-level profit margin of 24%. First quarter revenues were up 25% and profits climbed 49%.
Because investors notice when a company is growing at these levels, Mindray is not cheap, unfortunately. It has a market cap of $3 billion (on $212 million of revenue) and a Price/Earnings ratio of 55. Even the P/E/Growth ratio is 1.46.
But Mindray finds itself in perhaps the sweetest of sweet spots: it is a low-cost provider of machines that provide more efficient healthcare. Given the low cost of manufacturing in China, a healthy R&D budget, excellent penetration of the growing Chinese market, and a good reputation outside of China (and skyrocketing sales) – what’s not to like?
RELATED READING:
- Biosimilars and China
- China's Recent Chanes in Health Policy a Pre-Olympics Tactic
ChinaBioToday.com is a regular contributor to BioHealthInvestor.com
_________________
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