迈瑞医疗：Expect domestic business to rebound from 2025

Investment Rating - The report maintains a "BUY" rating for Mindray, indicating a potential return of over 15% over the next 12 months [9][21]. Core Insights - Mindray reported a revenue of RMB 29.5 billion for the first nine months of 2024, reflecting an 8.0% year-on-year growth, while the attributable net profit increased by 8.2% year-on-year to RMB 10.6 billion [2][5]. - The domestic market is under pressure, with a notable decline in revenue from public hospitals and IVD testing, particularly in lower-tier hospitals, leading to a 9.7% year-on-year drop in domestic revenue in Q3 2024 [2][5]. - The overseas business showed healthy growth, with a 18.6% year-on-year increase in overseas revenue in Q3 2024, driven by strong performances in Europe, APAC, and Latin America [5][9]. Financial Summary - Revenue projections for FY24E, FY25E, and FY26E are RMB 37.4 billion, RMB 43.6 billion, and RMB 49.7 billion respectively, with year-on-year growth rates of 7.1%, 16.5%, and 14.0% [3][17]. - Attributable net profit estimates for FY24E, FY25E, and FY26E are RMB 12.8 billion, RMB 14.7 billion, and RMB 16.8 billion, with corresponding growth rates of 10.7%, 14.8%, and 14.3% [3][17]. - The adjusted net profit for FY24E is projected at RMB 12.7 billion, with an adjusted EPS of RMB 10.58 [3][17]. Market Performance - The current market capitalization of Mindray is approximately RMB 336.7 billion, with a target price adjusted to RMB 328.81, indicating a 21.6% upside from the current price of RMB 270.50 [6][7]. - The stock has experienced a relative performance decline of 5.5% over the past month and 18.4% over the past six months [6]. Business Segments - The IVD segment saw domestic revenue growth of 17% year-on-year in 9M24, although the overall demand in lower-tier hospitals was negatively impacted by nationwide DRG implementation [5]. - The MIS segment reported over 10% year-on-year growth in domestic revenue in 9M24, driven by the strong uptake of the Resona A20 ultrasound system [5]. - Emerging businesses such as minimally invasive surgery and animal medical have shown significant growth, contributing over 10% to overseas revenue [5].