Mindray to Benefit from China’s Upgrade Programme

Spending Spree Fuels Growth For Mindray

China expects to spend $124 billion over the next three years to upgrade medical care. A good chunk of that is going into medical infrastructure, such as building, supplying and staffing hospitals.

That should help Mindray Medical International (MR), a leading maker of medical devices in China. The company started in 1991 making patient-monitoring devices, then branched into medical imaging equipment.

Mindray moved into the U.S. market in a big way with the acquisition of New Jersey-based Datascope in May 2008. They’ve already released new products for the U.S. market, including ultrasound equipment.

The U.S. medical device market is suffering right now over uncertainty as to how an overhaul of the health care system will turn out. And the recession has hurt hospital budgets. With the twin curses of the economy and politicians, hospitals are reluctant to spend on expensive equipment.

Mindray has plans to expand geographically and technologically. It sells in more than 190 countries, but usually indirectly except in the West. The company has said it plans to have more of a presence in emerging markets.

Mindray went public on the NYSE in September 2006. It has seven straight years of earnings growth and is expected to keep growing. Its EPS Stability Rating is 18.

In Q2, the latest reported quarter, earnings were 29 cents a share, a 38% increase from the previous year. That was 2 cents better than estimates. Sales rose 10%.

Analysts expect 2009 earnings of $1.11 a share, a 16% increase.

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