Mindray(SZ:300760)2024-05-02 03:00Investment Rating - The report maintains a "Buy" rating for Mindray Medical (300760.CH) with a target price of RMB 390, indicating a potential upside of 29% from the current price of RMB 302.11 [2][3]. Core Views - Mindray Medical's 2023 performance met expectations, while the revenue growth for Q1 2024 was slightly below forecasts. However, the company achieved steady growth in net profit due to cost optimization. A recovery in revenue growth is anticipated in the second half of 2024, driven by medical equipment procurement and a low revenue base in the second half of 2023 [2][3]. - The report highlights that the EU investigation into Chinese medical device procurement is expected to have limited impact on Mindray, as the company’s contracts in the EU are below the thresholds set by the investigation [2][3]. Summary by Sections Financial Performance - In 2023, Mindray's revenue grew by 15% year-on-year, with Q1 2024 showing a 12% increase. Domestic revenue increased by 15% in 2023 but only 3% in Q1 2024, while international revenue rose by 16% in 2023 and 30% in Q1 2024 [2][3]. - The breakdown of revenue growth by segment shows: Life Information and Support revenue grew by 14% in 2023 but declined by 20% in Q1 2024; In Vitro Diagnostics revenue increased by 21% in 2023 and surged by 63% in Q1 2024; Medical Imaging revenue rose by 9% in 2023 and 45% in Q1 2024 [2][3]. Future Outlook - The report anticipates that procurement for medical equipment will commence in the second half of 2024, following the completion of demand assessments across provinces. This is expected to boost revenue growth for Mindray [2][3]. - The government’s action plan to promote large-scale equipment updates and the normalization of procurement demand due to anti-corruption measures are expected to further support revenue recovery [2][3]. Financial Projections - Revenue projections for Mindray are as follows: RMB 41.28 billion in 2024, RMB 50.09 billion in 2025, and RMB 60.19 billion in 2026, with year-on-year growth rates of 18.2%, 21.3%, and 20.2% respectively [3][7]. - Net profit projections are RMB 13.91 billion in 2024, RMB 16.73 billion in 2025, and RMB 20.16 billion in 2026, with consistent growth rates around 20% [3][7].