Mindray announced on May 26 that it was to raise RMB 6,626 million with offering no more than 121.6 million shares, and planned to be listed on Shenzhen Stock Exchange. RMB 1,800 million will be used for operation capitals and paying bank loans, and the remains will be used for several projects including manufacture facilities for surgical products and bio-reagents in Nanjing city, upgrading of R&D platforms and sales & marketing system.
After its going private at US$ 3.3 billion from NYSE, Mindray now is ready for IPO in China which is already one of the key medical device markets in the world. Sales volume of medical device products in China was USD 55.6 billion in 2016 with a CAGR of 21.0% from 2010 to 2016, according to China Medical Device Industry Yearbook (2017 Edition) from MDT Research Inc. (Previously China MedTech Marketing Company, CMTM).
Based in Shenzhen city in South China, Mindray is one of the leading medical device manufacturers in China with total revenues of RMB 9,032 million and net profits of RMB 1,734 million in 2016. Life supporting products, IVDs, and medical imaging products accounted for 39.5%, 32.1%, and 26.1% of its total sales respectively. Color ultrasound equipment is the main product of Mindray’s medical imaging business and it ranked 3rd in terms of revenues in 2016, following GE Healthcare and Philips Healthcare, according to the report China Market of Color Ultrasound Equipment from CMTM. Unlike GE and Philips which dominate the high end color ultrasound market in China, Mindray is quite strong in the middle range segment with key customers of county based hospitals and other tier 2 hospitals in cities.
Merge & acquisition has already been one of the key strategies for Mindray’s expanding in the recent years. In the global market Mindray acquired patient monitoring business of Datascope in 2008 and acquired color ultrasound manufacturer ZONARE in 2013. From 2011 to 2014, Mindray acquired a series of local products including Shenzhen SK Medical, Suzhou Hyssen Biomedical, Changsha TDR Biotech, Hangzhou Guangdian and Shanghai Long Island Biotech, expanding new business into infusion pumps, IVDs, and endoscopes.
Mindray now has 57 subsidiaries including 18 overseas companies. Mindray’s products have been exported to more than 190 countries and 50% of its revenues were from overseas sales in 2016. Overseas business will be quite critical for Mindray’s future development in the next few years.
In the recent three years, without many M&A cases Mindray is still quite active in expanding local market. In April 2016 Mindray established strategic partnership with Shanghai United Imaging Company which is another giant of medical imaging equipment. In this May Mindray also launched a series of new products at the 77th China Medical Equipment Fair (CMEF) in Shanghai. At the end of 2016, Mindray presented “Ruiyi Project” to expand private healthcare market.
Focusing on both technology innovation and M&As in the near future, Mindray is trying to be one of the leading medtech companies in the world. Mindray will also try to improve R&D capabilities and obtain sales channels via overseas M&As, while in China it seeks to acquire companies which can add new product lines.
Besides Mindray other China leading local companies such as Yuwell Medical, Fosun Group, and MicroPort, are also actively expanding overseas business via acquisitions and investments, according to Owen Tang at MDT Research.
China is trying to improve public health service system, medical service system, and the national healthcare system in the period from 2016 to 2020, and establishment of hierarchical medical system is quite critical for providing better medical services in China. Under this situation medical device industry will be supported strongly in the next five years. A series of 13th Five-Year Plans were released at the end of 2016 including:
- The 13th Five-Year Plan for Development of China’s Strategic Emerging Industries (2016 – 2020)
- The 13th Five-Year Plan for Biotech Industry (2016 – 2020)
- The 13th Five-Year Plan for Health (2016 – 2020)
- The 13th Five-Year Plan for Deepening Healthcare Reform(2016 – 2020)
Under current situation in the Chinese medical device industry, Mindray’s IPO in China will help it raise enough money for future development and its market value will also be increased remarkably.
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