20260402-招银国际-迈瑞医疗-300760.SZ-Navigating_near-term_pressures_expect_growth_to_resume_in_2026E_6页_1mb

Mindray (300760 CH) Summary

Core Content

Mindray, a leading Chinese healthcare technology company, reported its financial results for 2025, with revenue of RMB33.3bn (-9.4% YoY) and attributable net profit of RMB8.1bn (-30.3% YoY), both below estimates. The company is facing near-term challenges, primarily from its domestic business, which was impacted by hospital budget constraints and policy pressures in the IVD market. The company's overseas business, however, showed resilience, contributing RMB17.7bn in revenue, or 53% of total revenue, with a YoY growth of 7.4%.

Main Points

• Domestic Business Challenges:

  • Domestic revenue declined by 23.0% YoY to RMB15.6bn in 2025, pressured by reduced hospital procurement budgets and policy headwinds such as DRG/DIP and chemiluminescence VBP.
  • The domestic business is expected to bottom out in 2026E, but Mindray remains optimistic about its long-term recovery, driven by IVD share gains and the growth of emerging businesses.

• Overseas Business Resilience:

  • Overseas revenue grew by 7.4% YoY to RMB17.7bn, with Europe leading the growth at 17% YoY.
  • The overseas business is viewed as a key growth driver, and is expected to reaccelerate in 2026E as Mindray deepens local operations and expands into higher-end accounts.

• Emerging Businesses:

  • Emerging business revenue rose by 38.9% YoY to RMB5.4bn, representing 16% of total revenue.
  • These businesses, including minimally invasive interventions and animal care, are expected to become the next major growth drivers, supported by an aging population, adoption of minimally invasive procedures, and growth in pet healthcare.

• Financial Performance:

  • The company's attributable net profit margin dropped by 7.3ppts YoY, affected by domestic price cuts, FX losses, and higher overseas selling expenses.
  • Mindray lowered its 2026E revenue and earnings forecasts by 6% and 23%, respectively, due to lower-than-expected earnings in 2025.

• Valuation and Investment Outlook:

  • The target price was revised to RMB204.54, based on a 9-year DCF model with a WACC of 9.1% and a terminal growth rate of 3.0%.
  • The company maintains a "BUY" rating, indicating potential returns of over 15% over the next 12 months.

Key Information

• Shareholding Structure:

  • Smartco Development Limited holds 27.0% of shares.
  • Magnifice (HK) Limited holds 24.5% of shares.

• Stock Performance:

  • Current price is RMB165.90.
  • Previous target price was RMB249.21.
  • The stock has underperformed in the past 12 months, with a 23.3% downside from the previous target price.

• Financial Summary:

  • Revenue: RMB35.7bn in 2026E, expected to grow at 7.3% YoY.
  • Net Profit: RMB8.0bn in 2026E, with a YoY growth of -1.4%.
  • EPS: RMB6.62 in 2026E.
  • Net Debt to Equity: 0.5x.
  • Current Ratio: 2.6x.
  • Gross Margin: 59.05%.
  • Operating Margin: 29.76%.
  • Net Margin: 22.48%.

• DCF Valuation:

  • Equity value is estimated at RMB247,990mn.
  • The DCF per share is RMB204.54.
  • Terminal value is RMB348,683mn.

• Sensitivity Analysis:

  • The valuation is sensitive to changes in WACC and terminal growth rate.
  • Lower WACC and higher terminal growth rate result in higher equity value.

Conclusion

Mindray is navigating near-term pressures, with the domestic business expected to bottom out in 2026E and the overseas business remaining a key growth driver. Emerging businesses are becoming the next growth segment, and the company is well-positioned for long-term recovery. Despite margin pressure and FX volatility, the company maintains a "BUY" rating, indicating positive potential for future growth. The financial performance and valuation analysis suggest that the company is undervalued, with a target price of RMB204.54.