Mindray Medical International Limited (MR): New Analyst Report from Zacks Equity Research - Zacks Equity Research Report

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Summary:
Mindray Medical posted mixed third-quarter 2014 results wherein revenues grew 9.6% year over year but earnings fell 4.4%. However, earnings were in line with our expectations. Though revenues largely benefited from double-digit sales growth in China and Western Europe, sales at certain key emerging markets continue to be affected by unfavorable foreign exchange and political issues. In the face of increasing uncertainties in currency and other macro developments, Mindray expects 2014 net revenue year-over-year growth below 10%, lower than the earlier growth guidance of at least 10%. However, Mindray maintains a decent product pipeline and brings out several products each year which should drive sustainable growth. Therefore, we maintain our Neutral recommendation on Mindray and set a target price of $28.00.


Overview:

Mindray Medical International Limited (MR), headquartered in Shenzhen, China, commenced operations in 1991. The company conducts much of its business through its consolidated operating subsidiary, Shenzhen Mindray, which was established in 1999. Mindray owns about 99.9% of the equity of Shenzhen Mindray. It maintains its global operational headquarters (HQ) in Shenzhen while the U.S. HQ is in Mahwah, New Jersey.

Mindray is a developer, manufacturer and seller of medical devices globally. It has three segments, namely Patient Monitoring and Life Support products, In-Vitro Diagnostic products and Medical Imaging Systems.

Mindray's largest segment, Patient Monitoring and Life Support includes products such as patient monitoring devices (PMD), anesthesia devices, defibrillators, surgical lights, and beds. Generally, PMDs measure real-time, concurrent, or dynamic physiological parameters such as heart rate, blood pressure, respiration, and temperature. In China, the company is the leading player in the patient monitoring market.

The In-Vitro Diagnostics segment or IVD includes products in 5 instrument categories used for diagnostic testing: hematology analysis products, biochemistry analysis products, urine sediment analysis products, microbiology analysis products and coagulation analysis products. In addition, the company manufactures and sells over 150 separate reagents for both hematology and biochemistry analyzers. Reagents are a major source of recurring revenue.

The Medical Imaging Systems segment includes the following product lines: black and white ultrasound, color ultrasound, and digital radiography. Historically, this product segment has consisted primarily of portable and mobile ultrasound systems.

The Others segment derives revenues from provision of after-sales services along with research and development services performed for original design manufacturers (ODM). This segment also includes revenues from acquired business, such as orthopedic products, endoscope devices and healthcare IT solutions products that are outside the other three business segments.

Mindray sells products through different distribution channels in various parts of the world. In the U.S., U.K., France, Germany and the Netherlands, the company sells its products through a direct sales model. In China, it sells its goods mainly to third-party distributors.

The company reported total revenues of $1.2 billion in 2013, reflecting year-over-year growth of around 14.5%. Revenues from China accounted for 45.4% of the company's total revenues while the same from international operations comprised 54.6% of total revenues.


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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.




This article appears in: Investing , Stocks

Referenced Stocks: MR , HQ , PMD

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