Another "big white horse" performance has changed. In the first three quarters of this year, Mindray Medical's operating income was 29.48 billion yuan, a year-on-year increase of 7.99%; net profit was 10.64 billion yuan, a year-on-year increase of 8.16%. At first glance, it

Another "big white horse" performance has changed.

In the first three quarters of this year, Mindray Medical operating income was 29.48 billion yuan, a year-on-year increase of 7.99%; net profit was 910.64 billion yuan, a year-on-year increase of 8.16%. At first glance, it seems okay, but if you look at the third quarter alone, the conclusion is completely different.

In the third quarter of this year, Mindray Medical’s operating income was 8.954 billion yuan, a year-on-year increase of only 1.4%; net profit was 3.076 billion yuan, a year-on-year decrease of 9.3%.

You must know that in the past few years, Mindray Medical's growth rate has remained at around 20%. Therefore, from +20% to -9.3%, Mindray Medical's performance caught the market off guard.

Regarding the reason for the performance loss, the official explanation is as follows:

"Domestic rectification of the medical field and medical equipment update projects and other factors have led to delays in hospital procurement. At the same time, hospital construction funds are tight and non-rigid medical demand is sluggish. The domestic market The growth in the first three quarters was less than 2%. "

The summary is: The hospital is out of money, and the patients are out of money!

So the question is, does it mean that the fundamentals of Mindray Medical are completely broken?

In the financial report, Mindray Medical has such a set of data, In the first three quarters of this year, the growth rate from overseas markets exceeded 18%, of which the growth rate in the European and Asia-Pacific markets exceeded 30%.

Generally speaking, it is more difficult to sell medical equipment overseas than domestic sales. Therefore, behind this data, it shows that Mindray Medical’s products have no problems and are still very competitive. The reason may be as explained, the domestic market demand is lagging behind. .

Let’s talk about the fundamentals of this company.

Mindray Medical is a medical device company whose main products cover the three fields of life information and support, in vitro diagnosis and medical imaging. In 2024, Mindray Medical ranked 27th among the top 100 global medical devices.

According to incomplete statistics, the global market share of Mindray Medical's monitors, anesthetics, ventilators, , defibrillators, blood cells, ultrasound and other products has firmly ranked among the top three. In the company's words, Mindray Medical's products have been exported to more than 190 countries and regions, and it has established 63 overseas subsidiaries in about 40 countries in North America and Europe.

Note that even in the US market, Mindray Medical has a place. At present, Mindray Medical has carried out business in nearly 90% of IDN medical consortiums in the United States. Its main products sold in the United States, such as monitors, anesthetics, and POC ultrasound, have achieved the top three market shares in the market.

In addition, Mindray Medical is a company that attaches great importance to research and development.

From 2020 to 2023, Mindray Medical’s R&D expenses were 1.869 billion yuan, 2.524 billion yuan, 2.923 billion yuan and 3.433 billion yuan respectively, exceeding the revenue growth rate, and the R&D expense rate exceeded 9%. Generally speaking, if this number exceeds 4%, it is considered excellent. However, Mindray Medical's number is more than double.

Let’s focus on dividends.

As we all know, many A-share companies are stingy about dividends, but Mindray Medical’s dividends are very generous. From 2018 to the first half of 2024, Mindray Medical paid dividends 8 times, with a total dividend amount of 27.72 billion yuan; if plus the 2 billion yuan dividend in the third quarter, the total dividends of Mindray Medical since its listing reached 29.72 billion yuan, which is the amount of financing 5 times.

Let’s put it this way, being able to pay dividends so generously, and the amount of dividends far exceeds the amount of financing, is rare in A-shares.

So the question is, since Mindray Medical is so good, the stock price is a different story?

The reason is actually very simple. In view of Mindray Medical's past excellence, the capital market has always maintained high expectations for it. However, the market environment has made it difficult for Mindray Medical to perform beyond expectations. In addition, the domestic centralized procurement of medical devices, delays in superimposed equipment bidding, and various political obstacles encountered in overseas market expansion have all hit market confidence.

For the company, the ups and downs that have gone through for decades have long been forgotten. But in the eyes of the capital market, because of the existence of these potential crises, it is difficult to reproduce the valuation levels before 2019.

Of course, this is also an opportunity.

On the one hand, Mindray Medical’s industry status and product competitiveness are there, and its performance growth rate is guaranteed; on the other hand, Mindray Medical has a unique vision in mergers and acquisitions, which can accelerate the growth of its performance. In the past, Mindray Medical's valuation was close to 100 times, but now it is only more than 20 times. Even the valuation of international medical device giants, Mindray Medical has reached a very low level.

personal opinions, for reference only