MR Montage Resources Corporation

Mindray Medical International Limited (MR), a leading Chinese medical devices company, recently revealed that its Mindray V Series patient monitoring system bagged a gold award at the 2011 Medical Devices Excellence Award (“MDEA”).

This event is an awards program for the med-tech universe in which products are considered on the basis of features/design that improve delivery of healthcare and reform medical practices.

The Mindray V Series patient monitoring system is a scalable platform that brings acuity and continuity of data at the point of care. This device is an outcome of research focused on the pitfalls of critical care. The company has tested its V Series in real-life situations. By focusing on the most critical data, the Mindray V Series patient monitoring system avoids false alarms and a data dump.  

The V Series V21 and V12 patient monitoring system offers both adaptability and flexibility. It also grants spontaneous connectivity with its VAcess application, thereby placing the user in touch with patient data flow, such as electronic health record (“EHR”). Last but not the least, the V Series provides cutting edge user interface.

Mindray reported first-quarter fiscal 2011 adjusted (excluding one-time expenses other than stock-based compensation expense) earnings per share of 32 cents, missing the Zacks Consensus Estimate of 34 cents. Revenues surged 24% year over year to $180.9 million, exceeding the Zacks Consensus Estimate of $164 million.

At the segment level, Patient Monitoring & Life Support Products revenues increased 26.6% year over year in the quarter to $78.1 million (43% of total sales).

Mindray provides guidance on a full year basis. The company maintains its revenue growth guidance of 16% for fiscal 2011. It also expects adjusted net income for the year to increase 10% year over year.

Mindray represents one of the highest-quality brands in the Chinese healthcare sector and is a bellwether for the medical device industry in that country. The company’s key competitive edge in its domestic market is its sales infrastructure, which has provided Mindray significantly better access to China’s small- and medium-sized hospitals than its competitors.

In this segment, the company beats global manufacturers such as General Electric (GE), Philips (PHG), and Siemens (SI) on the basis of price.

Currently, non-tendering activity, in China, is expected to remain at a high level on account of a shift in subsidies from the national level to the county hospital level. Brand recognition, and favorable pricing, should enable Mindray beat the domestic competition at Tier II and Tier III Chinese hospitals.

Mindray is still realigning its sales force and re-building its brand image to penetrate the high-end market. Since, Mindray’s strength is currently in the low- and mid-end market segments, we do not expect any immediate impact from its high-end strategy.

In the meantime, Mindray has successfully garnered share by targeting mid-sized, potentially more price-sensitive customers who may be looking for medical devices offered at lower prices than global brands. We believe that new product launches and good demand from international markets will be major growth drivers for the company.

 
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