The epidemic and centralized procurement are both suppressing the rules of the game in the equipment industry are quietly changing

Under the dual pressure of the epidemic and centralized procurement, the rules of the game in the equipment industry are quietly changing

Which way is right? As the storm and the bonus period recede, the answer is gradually coming to the surface

Mindray announces three quarterly reports, revenue and profits both increase

On October 20, Mindray Medical released the "2021 Third Quarter Report"

The report shows that in the first three quarters of 2021, the company achieved operating income of 19.

In terms of R&D investment, R&D investment in the first three quarters of 2021 was 1.

Mindray Medical disclosed that there are many reasons for the growth in performance

In the regional dimension, the growth is mainly driven by the domestic market

At the same time, the domestic epidemic situation remained stable as a whole, and the hospital's routine diagnosis and treatment activities and the company's various businesses gradually returned to normalization.

In terms of production line dimensions, the gradual recovery of domestic and some international hospitals’ diagnosis and treatment activities and routine procurement has continued to restore demand for routine diagnostic procurement such as ultrasound, blood cells, biochemistry, and luminescence, driving the two major business areas of medical imaging and in vitro diagnostics during the reporting period.

Thanks to the gradual development of new domestic medical infrastructure and the rapid development of emerging businesses such as AED and minimally invasive surgery, the life information and support business continued a good growth trend during the reporting period

Profit growth is faster than revenue, mainly due to domestic and international sporadic epidemics.

Acquire well-known raw material suppliers

In vitro diagnostics is one of Mindray's core businesses

On September 22, Mindray Medical’s acquisition of HyTest Invest Oy (hereinafter referred to as "Hotide Bio") and 100% of its subsidiaries was completed and the transaction price was 532 million euros (4.

After the completion of the settlement, Mindray Holland, a wholly-owned subsidiary of Mindray Medical, has directly or indirectly held 100% of the equity of Haitide Biotechnology and its subsidiaries, and enjoys various shareholder rights and assumes corresponding shareholder obligations in accordance with the law

The Mindray Medical report shows that the acquisition of Seatide Bio is aimed at strengthening the core research and development capabilities of chemiluminescence immune products and raw materials, optimizing the global layout of the upstream and downstream industrial chain, and laying the foundation for the globalization of the company's in vitro diagnostic business

Established in 1994, Seatide Bio is the world's top professional in vitro diagnostic upstream raw material supplier.

At the technical level, Seatide Bio has solid monoclonal antibody design, R&D and production capabilities, and at the same time, it can quickly meet new and growing market needs, such as the rapid design and development of key new reagents for Covid-19
.

Mindray Medical stated that there are many gaps in the field of upstream top raw materials for external diagnosis.
Mindray Medical will strengthen the self-developed and self-produced core raw materials and increase the self-made ratio of core raw materials
.
Self-made raw materials can ensure stable quality, safe supply, and cost optimization, and help solve the problem of "stuck neck" in the supply of upstream raw materials for in vitro diagnostics
.

Sea peptide biology can help Mindray Medical to quickly improve its expertise in raw material research and development; its team, innovative processes and new technology applications help the company pave the way for long-term development
.

Growth and risk coexist

According to the 2021 semi-annual report of Mindray Medical, Mindray Medical’s three main businesses of life information and support, in vitro diagnostics and medical imaging have all achieved varying degrees of growth
.

During the reporting period, the life information and support business achieved operating income of RMB 6,020,960,200, a year-on-year increase of 12.
68%; the in vitro diagnostic business achieved operating income of RMB 3,961,652,500, a year-on-year increase of 30.
76%; medical imaging business achieved operating income of RMB 2,670,847,600, a year-on-year increase of 26.
87%
.

Mindray Medical stated that the business growth is mainly due to the gradual development of new medical infrastructure led by the expansion of large public hospitals in China.
The construction content includes new operating rooms, ICU wards, and branches of large public hospitals.
The construction of key departments includes surgery, Departments of Critical Care Medicine, Anesthesiology, Imaging, Laboratory and other departments that focus on improving surgical capabilities
.

In addition, the amount of routine testing reagents in China and some international regions is also recovering
.
Routine diagnosis and treatment activities in China and some international regions have gradually resumed.
Last year, ultrasound purchases that were suppressed by the epidemic showed a normalization trend, and the medical imaging business achieved recovery growth in the first half of the year
.

Regarding risk issues, Mindray Medical also frankly stated in the semi-annual report that with the deepening of the reform of the medical system, some provinces or regions have introduced a series of policies such as bidding and price cuts, graded diagnosis and treatment, medical consortia, sunshine procurement, and two-invoice system.
The equipment industry is facing certain price-cutting pressures and trends
.

At the same time, with the increasing pressure of domestic and even global medical insurance payment, end customers will increase the weight of product cost-effectiveness when purchasing products.
The increasingly fierce market competition pattern poses new challenges to the company's continuous improvement of market competitiveness
.
If the company's product prices are reduced by a large margin, it may affect the company's future profitability
.

In terms of the epidemic, last year, the company’s vital information and support business monitors, ventilators, infusion pumps, and medical imaging business’s portable color Doppler ultrasound, mobile DR and other medical equipment related to the anti-epidemic increased significantly.
If the company’s future performance fails Maintaining sustained growth in the presence of a high base will bring risks to the company's operating performance fluctuations
.

On the other hand, the current global epidemic situation is still unclear, which has hindered global flow.
Overseas restrictions on population entry and cargo logistics and transportation may have a certain adverse impact on the company's overseas sales and overseas purchases
.