Will the Q3 performance reverse? Mindray's Hong Kong listing adds fuel to the fire: Tender recovery + international acceleration, is the timing of the listing reasonable?

On July 22, foreign media reported that the leading domestic medical device company, Mindray Medical, plans to list in Hong Kong, aiming to raise no less than 1 billion USD (approximately 7.8 billion HKD).

In response to the rumors of listing in Hong Kong, Mindray Medical replied to the media: Refer to the official announcements for accurate information.

Public information shows that Mindray Medical was listed on the A-share ChiNext board on October 16, 2018. As of now, its total market value in A-shares exceeds 270 billion RMB, ranking among the top three in the A-share pharmaceutical sector, only behind Hengrui Medicine (378.8 billion RMB) and BeiGene (365.9 billion RMB).

As a leading enterprise in the domestic medical device industry, Mindray Medical's consideration of a secondary listing in Hong Kong reflects its emphasis on the capital market and active business development layout.

According to relevant sources, Mindray Medical is discussing the share issuance plan with several advisory institutions. The plan is still under review.

"The First Stock of Medical Devices" Faces Growth Bottleneck! International Market Supports 45% of Revenue

As the undisputed "First Stock of Medical Devices" in A-shares, Mindray Medical has always been rooted in the "Technology + Globalization" dual-wheel drive strategy.

Looking back over the past three years, Mindray Medical's performance:

In 2022, Mindray Medical achieved an operating income of 30.366 billion RMB, a year-on-year increase of 20.17%; net profit attributable to the parent company was 9.607 billion RMB, a year-on-year increase of 20.07%. The growth rates of its three main businesses—life information and support, in vitro diagnostics, and medical imaging—were in sync with the overall performance growth, with overseas revenue stabilizing at the 10 billion RMB mark.

In 2023, it achieved an operating income of 34.932 billion RMB, a year-on-year increase of 15.04%; net profit attributable to the parent company was 11.582 billion RMB, a year-on-year increase of 20.56%, with the in vitro diagnostics business performing outstandingly, growing by over 20%.

In 2024, its growth momentum accelerated, with operating income of 36.73 billion RMB, growth rate dropping to 5.14%; net profit attributable to the parent company was 11.67 billion RMB, a slight increase of 0.74%, the lowest level since its listing in 2018. Among them, the revenue from the in vitro diagnostics business surpassed the life information and support business for the first time, with the latter's revenue declining by 11.11%.

Clearly, from the recent years' revenue and net profit attributable to the parent company, Mindray Medical's growth rate is showing a downward trend.

Among them, the international market has become a stronger incremental market for Mindray Medical. In 2024, its domestic business was affected by the sluggish hospital equipment bidding and procurement and the DRG2.0 policy, with business revenue declining by 5.1%; in contrast, the international market has been steadily expanding, with revenue growing by 21.28%, accounting for about 45%, with developing countries contributing 66.39%, becoming a growth engine.

With the structural pressure on performance growth, it seems that increasing globalization has become a wise choice for Mindray Medical to break the situation.

However, unexpectedly, despite the high base of international business in the first quarter of last year, the compound growth rate of international business over the past two years exceeded 15%, with developing countries' compound growth rate approaching 19% over the past two years, the actual year-on-year growth of its international business in 2025 was less than 5%.

Obviously, such a growth rate is far from enough to achieve the goal of overseas revenue accounting for more than 70%. Looking back, to efficiently achieve this goal, acquiring high-quality assets, especially high-end technology, may be a feasible path.

In the past decade, Mindray Medical has completed technological leaps through at least five key acquisitions: acquiring Datascope in 2008 to enter the North American monitoring market, acquiring ZONARE in 2013 to complement high-end ultrasound technology, acquiring HyTest in 2021 to solve the "bottleneck" of IVD raw materials, and acquiring Germany's DiaSys in 2023 to improve the European supply chain.

Now, among its localized production bases in 13 countries worldwide, 9 have been put into operation, but more funds are needed to support the construction of more overseas factories and the landing of innovative businesses such as AI medical and surgical robots.

It seems that a secondary listing in Hong Kong is a natural and wise choice for Mindray Medical, even if not this time, it is believed that it will be promoted in the future.

R&D Investment Increases Year by Year!

According to Mindray Medical's chairman Li Xiting, who previously publicly pointed out, the company's strategic goal is to rank among the top 10 in the global medical device comprehensive strength within 5 years, by 2030.

To achieve this goal, the company's management has reached two core consensuses: first, to increase R&D investment and conquer core technologies as the foundation, Li Xiting emphasized "if core technologies are not mastered, it is difficult to reach a higher level"; second, to deepen the global layout, contributing more to global human health, promoting the company's ranking in the global medical device field, and internationalization has been established as a long-term strategic direction.

From the 2024 data, Mindray Medical's R&D investment reached 4.008 billion RMB, accounting for 10.9% of the year's revenue, and the raised funds will further support the landing of innovative projects such as medical large models and ultra-high-end ultrasound. Especially in overseas expansion, in addition to continuously consolidating each business line, it also plans to focus on the imaging AI field in the future, enhancing international competitiveness by creating a "device + IT + AI" intelligent overall solution.

For example, the company has launched the "Qiyuan Critical Care Medical Large Model" and constructed the "Ruijing Ecosystem" solution, and may further improve this ecosystem by acquiring ultrasound AI algorithms and other imaging AI targets in the future.

It is worth noting that Mindray Medical recently introduced the surgical robot business for the first time at an investor meeting. Currently, the domestic surgical robot field generally lacks systematic R&D and production capabilities—new entrants are often limited by imperfect R&D, manufacturing, and sales systems, while large cross-border enterprises are constrained by technology and experience accumulation.

However, Mindray Medical has prioritized the completion of underlying capability construction in its initial layout, accumulating a solid technical foundation in basic fields such as endoscopy, energy platforms, and instruments.

Although it is a latecomer in the industry, it has the strength to catch up quickly with its vertically integrated industrial chain advantages and systematic capabilities, aiming to help domestic surgical robots achieve technological breakthroughs and large-scale development, ultimately reaching a global leading level.

Regarding the shortcomings in overseas high-value consumables marketing, such as insufficient localized delivery, channels, and sales capabilities, Mindray Medical proposed a "dual-track strategy": on the one hand, building localized capabilities, on the other hand, supplementing shortcomings through external acquisitions. The previous acquisition of Germany's DiaSys is a typical case, providing important support for Mindray's global production layout and logistics delivery capabilities.

In the future, it also plans to consider acquiring overseas localized platforms in high-consumption fields such as cardiovascular and minimally invasive surgery to fill the resource gap of professional sales personnel and distributors.

In the construction of a global supply chain, by the end of 2024, Mindray Medical has launched localized production projects in 13 countries, with factories in 9 countries officially operating, significantly improving the response speed of regional supply chains. To cope with trade barriers in the European and American markets, more overseas production base construction will be included in the funding plan in the future.

After determining the longer-term development strategic direction, how to balance investment and investor returns has become a must-answer question.

In response, Mindray Medical has also made a clear response.

As the big brother of medical devices, although the performance growth has been under phased pressure due to the demand cycle in the past two years, Mindray Medical emphasized, "The company has not reduced the intensity of R&D due to dividends. R&D innovation is the source of Mindray's development power, and Mindray insists on high R&D investment, investing about 10% of revenue in R&D every year, ranking among the top in the industry."

Through the financial report data over the years, it can also be found that, similar to the entire innovative medical track, Mindray Medical's R&D investment is increasing year by year. In 2024, its R&D investment was 4 billion RMB, accounting for nearly 11% of the operating income of the same period; the number of R&D personnel exceeded 5,200, accounting for 24.3% of the total number of employees.

The company bluntly stated, "In the future, it will continue to maintain high R&D investment, enhance the technical level of various businesses through original and intelligent innovation, continuously enrich equipment and consumable products, accelerate high-end breakthroughs and import substitution."

As for the investment return issue that investors are concerned about, it also pointed out that "after deducting R&D expenses, the company shares the operating results with investors through dividends. The company will effectively balance R&D and investor returns and make dividend decisions after comprehensive consideration."

Optimistically, Mindray Medical has previously predicted that the company's third-quarter performance will achieve a reversal. The company stated, "Since December last year, the monthly bidding data for medical equipment in the domestic market has shown a continuous recovery trend. However, in the current competitive environment, the time difference from public bidding to revenue recognition has been significantly extended, so the actual domestic revenue in the first half of this year reflects the sharp decline in bidding last year, resulting in a year-on-year decline of more than 20% in domestic business in the first quarter, but a quarter-on-quarter increase of more than 50% compared to the fourth quarter of last year.

Looking forward to this year, as medical equipment renewal projects gradually start, if the recovery of monthly bidding data for medical equipment can continue, and considering the very abnormal distribution of income in the past few years, especially the second quarter of last year was the highest base quarter for domestic business, the company is confident that domestic business will usher in a major turning point from the third quarter of this year.

In the international market, by continuing to increase efforts to build overseas localized platforms, the company expects that the growth rate of international business will recover from the second quarter, with developing countries expected to maintain a rapid growth trend throughout the year."

Hengrui and Mindray Both Head to Hong Kong! Dual Capital Platforms Become a "Must-Choose Option" for Leaders

Standing at the current point in time, if Mindray Medical's Hong Kong stock move is correct, then this is by no means an isolated event. Since 2025, A-share pharmaceutical companies such as Hengrui Medicine (Hong Kong stock market value of 478.5 billion HKD) and BeiGene have successively listed in Hong Kong for the second time, behind which is the industry's collective exploration of "dual capital platforms." Choosing Hong Kong stocks is not only a financing need, but for leading pharmaceutical and medical device companies such as Hengrui Medicine and Mindray Medical, it is also a strategic move in their "Globalization 3.0" strategy.

At the same time, Mindray Medical's Hong Kong stock move is also a window to observe the Chinese medical device industry. Currently, the industry is ushering in a "golden era," with core driving forces coming from three aspects:

First, the policy tailwind from "procurement suppression" to "innovation support." In July 2024, the National Medical Products Administration issued "Measures to Optimize the Whole Life Cycle Supervision and Support the Innovation and Development of High-end Medical Devices," clearly supporting fields such as medical robots, high-end medical imaging, and AI medical devices; in July 2025, China imposed import restrictions on high-end medical devices over 45 million RMB from the EU, accelerating domestic substitution. The policy shift from "strict supervision" to "promoting innovation" provides a "policy dividend period" for leaders like Mindray Medical.

Second, the trillion market + high-end breakthrough further opens up the growth ceiling for enterprises. The scale of China's medical device market has increased from 308 billion RMB in 2015 to 1.11 trillion RMB in 2024, and is expected to exceed 1.3 trillion RMB in 2025 and reach 2.8 trillion RMB in 2030. Among them, the proportion of high-end medical devices has increased from less than 20% five years ago to 38%, but the import dependency is still over 50% (especially in MRI, CT, and other equipment fields). The technological breakthroughs of companies like Mindray Medical, such as the ultra-high-end ultrasound Resona A20 and the underlying technology of surgical robots, are accelerating to fill this gap.

Third, from "A-share dominance" to "dual-platform drive" capital assistance. Since 2021, the A-share medical device sector has undergone deep adjustments, but in 2025, as the performance turning point approaches, institutions generally predict that the confirmation of bidding income in the third quarter will drive a performance reversal, coupled with the wave of secondary listings in Hong Kong stocks, the industry valuation is expected to recover. For Mindray Medical, listing in Hong Kong not only broadens financing channels but also enhances global brand premium through "synergy effects" with innovative drug companies in Hong Kong stocks (such as BeiGene).