On Mar 8, 2013, we retained
Mindray Medical International Limited
) at Neutral after the company beat Zacks Consensus Estimates for
earnings and revenue for fourth quarter 2012.
Why the Retention?
Mindray released its results for the fourth quarter on Feb 25.
The company posted adjusted earnings per share of 49 cents per
share, better than the Zacks Consensus Estimate of earnings of 48
cents a share. Revenues in the reported quarter surged 19.7% year
over year to $316.1 million, beating the Zacks Consensus Estimate
of $304 million.
Over the past 30 days, the Zacks Consensus Estimate for 2013
has moved up by 8 cents to $2.05. For 2014, the Zacks Consensus
Estimate has increased by 5 cents to $2.29 during the same
Mindray provides guidance on a full year basis. The company
forecasts revenue growth of 17% or more for 2013. MR also expects
adjusted net income for the year to increase by a minimum of 15%
year over year. The guidance does not take into account any tax
advantage on account of software business status during 2011 and
2012, which might be received in 2013. The guidance incorporates
an income tax rate of 15% for the Shenzhen subsidiary.
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 2012, the company launched 10
new products and acquired four companies.
The company has entered the premium segment globally, where
its competitive advantage is still unclear. Also, on the negative
side, health care reforms in China and the U.S. may reduce demand
for Mindray's products. Competition is fierce and leads to price
erosion over time.
Other Stocks to Consider
We currently have a Zacks Rank #2 (Buy) on Mindray.
Given Imaging Ltd.
) carry a Zacks Rank #1 (Strong Buy) and are expected to do
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MINDRAY MEDICAL (MR): Free Stock Analysis
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