Mindray Medical International

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OK, enough about the Home Inns (HMIN) and New Oriental (EDU), both of which are well known consumer brands based in Shanghai and Beijing respectively. On Sept 26, a not so well known medical device company based in Shenzhen (by Hongkong), did IPO on NYSE and it was well received by the investors. The company is Mindray Medical International, ticker symbol MR. It’s not the first Chinese medical device maker listed in the US. China Medical (CMED) came to NASDAQ about a year and half ago. But this MR is much bigger.  I looked at its F-1 form, and it seems like a solid company.

mindray logo picture 

Some key numbers:

Net revenue: RMB460.3 m (2003), RMB697.8 m (2004), RMB1078.6 m(2005), at compound anual growth rate of 53.1%; RMB436.8 m (first 6 months 2005), RMB676.8 m (same period 2006), 54.9% increase.

Net income:  RMB205.1 m (2005), RMB80.2 m (Jan to June 2005), RMB164.8 m (Jan-June 2006)

Earning per share (ADR): USD 0.29 (2005 full year), RMB 0.93 First 6 months 2005, RMB 1.86 same period 2006 (USD 0.23)  

It’s traded at about $18.00 as of today. It seems to me the PE ratio is more reasonable than Home Inns. Of course as investor we can not simply looked at PE ratio.

Products: patient monitoring devices; diagnoistic laboratory instruments; ultrasound imaging systems;  

Number of employees: 2438 (they emphasized a lot about 570 R&D engineers);  

Some of the strength: R&D, low cost manufacturing;

Risks: don’t expect the 50% growth can substain for a long time. Special tax benifit went away; China new anti-bribery law; expansion in the US could be costly as the FDA regulation is very stringent.  

It will announce the Q3 earning on Nov 16.

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