Is Mindray okay?

The world is full of coincidences and resonances, and since the launch of the sequel to "A Song of Ice and Fire" on August 21, the cold of the coming winter has immediately enveloped the market
.

Killing a big white horse a day, the maximum decline in Mindray Medical today reached 8.

No company is perfect, and during a panic period, any side problems can be magnified and forced to be interpreted as the reason for
the decline.

As one of the companies with the most stable operation and the most certain growth in the whole market, Mindray Medical's fundamentals cannot pick out obvious shortcomings, and the valuation is also within a reasonable range, but it suddenly plummets, especially for unknown reasons, which has a huge impact on
investor confidence.

Mindray Medical's corporate culture and business structure determine its steady style, can digest all kinds of interference, the operation will not easily fluctuate, and the growth period is still very long
.

Affected by the high base pressure of the same period last year, the overseas market in the first quarter of this year grew in single digits year-on-year, but it was full of resilience, the overseas market growth in the second quarter was close to 30%, the outpatient volume, hospitalization volume and surgical volume of the hospital under the new normal of the overseas epidemic situation were fully restored, and the routine business such as IVD reagents, ultrasound, and anesthesia machines achieved significant recovery
.

There's nothing new in the
world.

Now the emotional side and the capital side are greater than the fundamentals, and the evaluation system of the market is temporarily chaotic, but we know that the stock price is driven by performance for a long time, and common sense will eventually return
.

01 Stability is one word

Compared with minimally invasive medical treatment, Mindray Medical is another corporate culture, performance-oriented, taking into account innovation and growth
.

Through self-research + mergers and acquisitions, it has grown from a track oligarchy to a cross-border aircraft carrier
.

Mindray Medical spreads risks, smooths performance, provides stability with multi-line business, and at the same time expands new tracks horizontally, opens up new market space, and reflects growth
.

Mindray Medical's revenue in the first half of the year was 15.

In the contrarian trend, stability is a word, and the performance is in line with expectations
.

At present, the competitiveness of the company's products to achieve the world-class level of the main monitors, anesthesia machines, blood cells, ventilators, these four products last year in the domestic and international market position were the first in the country and the world's top three
.

02 How fast can elephants run?

We will definitely have our own global medical device giant, and Mindray Medical is accelerating
.

In the next few years, Mindray Medical's ultrasound, chemiluminescence, biochemical fields will gradually enter the world-class level, and the market capacity represented by these products will far exceed the above four products, and greater growth potential will be released
.

Lianying Medical, Kaili Medical, Aohua Endoscopy, Yirui Technology deduction of medical imaging high prosperity logic, in the first half of this year medical imaging business to achieve revenue of 3.
264 billion yuan, an increase of 22.
2%, high-end ultrasound accounted for more than half
of the domestic ultrasound revenue.
The main driving force is the breakthrough of the new high-end ultrasonic R series and the new mid-to-high-end ultrasound I series to bring about a breakthrough
in the high-end customer base at home and abroad.
The market share of ultrasonic business stood second in China
.

The high-potential seed businesses minimally invasive surgery, veterinary medicine, orthopedics, and AED are also steadily advancing, from which a fourth pillar business
may be born.
In the first half of this year, the minimally invasive surgery business achieved more than double growth, AED in the United Kingdom, France, the Netherlands, Italy, Norway to achieve large-scale installation, hard mirror business, 4k white light, 4k fluorescence sales are expected to double, the next generation of laparoscopic listing at the end of next year, can completely erase the gap
with Carl Stos, Olympus in product technology.

There is a new change that has not been taken seriously, and Mindray Medical is transitioning
from product advantages to system advantages.

The "Rui Zhilian" IT solution has achieved a total of nearly 300 hospitals with signed orders, of which more than 80 were added in the first half of this year, with rapid
growth.
"Rising Shadow Cloud ++" has achieved a cumulative installed capacity of more than 2,000 sets, and nearly 800 new installations were added in the first half of this year, and the installed capacity continued to accelerate
.
The "Mindray Smart Examination" laboratory IT program has achieved the installation of nearly 90 hospitals across the country, of which 70% are tertiary hospitals, and nearly 30 new installations were
added in the first half of this year.

Mindray Medical has gradually transformed from a supplier of medical device products to a solution provider to enhance the overall diagnosis and treatment capabilities of medical institutions, and this business model is both soft and hard, which can enhance customer viscosity and build a moat
.

03 Although it is difficult to collect, things are man-made

Although there is pressure on collection, the focus is on coping
.

Mindray Medical's superb business ability is also reflected in the attitude towards collecting, taking the initiative to forge ahead, and turning crises into opportunities
.

The in vitro diagnostic (IVD) business, which has been plagued by rumors, achieved rapid growth in the first half of this year, with operating income of 5.
143 billion yuan, an increase of 29.
8%
year-on-year.
Although the consumption of domestic in vitro diagnostic routine reagents in the second quarter was repeatedly affected by the epidemic, the trend showed a month-on-month improvement, and heavy products such as the blood cell BC-7500 series, chemiluminescence CL-8000i, and biochemical BS-2800M still achieved rapid installation
.

Anhui chemiluminescence collection triggered the pessimism of the market, but Mindray Medical made the plot a big reversal
.

Since the implementation of the chemiluminescence part of the project collection in Anhui in November last year to the end of the second quarter of this year, Mindray Medical's chemiluminescence business has achieved rapid progress
in Anhui Province, both in terms of instrument installation and reagent volume.
Among them, nearly 120 new installed machines of instruments, according to the company's statistics, account for about one-third of the newly installed capacity in the province, and successfully entered nearly 30 third-class hospitals, greatly shortening the time of
instrument admission.
In terms of reagents, in the first half of the year, the chemiluminescence business still achieved nearly 80% growth
in Anhui Province under the condition of being disturbed by the epidemic.

Last year's overall negotiations in Nanjing also helped Mindray Medical IVD and orthopedic business in the Nanjing market expansion, and since its implementation, the products have entered the major hospitals
in Nanjing at a faster speed.
Recently, the Nanjing Medical Insurance Bureau also urged the remaining hospitals to sign purchase agreements with the company as soon as possible in a notice issued to accelerate the admission of the company's products and ensure the completion of the procurement plan
.
Up to now, the admission of instruments has progressed smoothly, and chemiluminescence, biochemistry, and coagulation have achieved a large number of blank breakthroughs in the top three hospitals, and most of the installed models are the latest heavy instruments
.

The collection of liver function biochemical detection reagents led by Jiangxi is about to be auctioned
.

The proportion of the procurement cost of biochemical reagents in the inspection fee (terminal admission price) is only 10% to 15%, and the corresponding market size of liver biochemical reagents is 1.
8-2.
3 billion, and the influence of collection is limited
.

The market concentration of biochemical reagents is low, with more than 200 registered companies in the country with an average income of only tens of millions of yuan, which is related to
the opening of business models.
Most biochemical companies do not have the ability to develop and produce biochemical instruments, and choose agents or directly purchase biochemical instruments, so an open system
is formed.
The mainstream manufacturers Beckman and Mindray Medical are closed systems, which may be the direction
of market development.

From a clinical testing perspective, closed systems provide better quality control than open ones
.
It's just that in a market with extremely fragmented competition, it takes many years to achieve this step, and the process of gathering will be greatly shortened
.
In 2021, Mindray Medical's domestic biochemical reagent revenue will be about 900 million yuan (of which liver biochemistry accounts for about 20%), and the market share will only be 12%.

The process of domestic substitution will also accelerate
.
Tertiary hospitals are mainly imported biochemical instruments, and nearly 90% of Mindray Medical's domestic biochemical reagent revenue is concentrated in secondary and below hospitals, and collection can help domestic enterprises to open the doors of tertiary hospitals on a large scale and achieve curve overtaking
.

For the future IVD collection, Mindray Medical believes that the compression of collection and procurement is mainly the profit margin of the circulation link, and the collection itself is an opportunity for domestic high-quality enterprises that master core technologies and raw materials to
accelerate import substitution and rapidly expand market share.
The Medical Insurance Bureau has also repeatedly emphasized the strict prevention of malicious low-price competition, and to ensure the reasonable profits of production enterprises and encourage technological innovation
.

Mindray Medical is a company
that can stand the worst of time.