Mindray Medical IPO: Retelling a Story from Eight Years Ago

Author | Huang Yida

Editor | Zhang Fan

Recently, market sources reported that Mindray Medical International Limited (hereinafter referred to as "Mindray") plans to conduct an initial public offering (IPO) in Hong Kong and has initiated preliminary preparations. The target financing amount is at least $1 billion. As one of the leading enterprises in the domestic medical device field, Mindray holds a leading position in core business segments such as medical imaging, in vitro diagnosis, and life information and support.

As of September 25, 2025, Mindray's total market value exceeded 280 billion yuan. In terms of performance, although the revenue growth in 2024 faced some pressure, thanks to the competitiveness of its products and channels, combined with its global layout, the net profit attributable to the parent company in the same period was approximately 11.7 billion yuan, maintaining positive growth and demonstrating strong performance resilience.

Then, why does Mindray, a leading enterprise in the industry with stable performance, choose to launch its Hong Kong IPO at this time?

01 The proportion of overseas revenue continues to increase

One of the important backgrounds for Mindray to launch its Hong Kong IPO recently is the continuous increase in the proportion of its overseas revenue, which now accounts for 50% of the company's total revenue. This is also one of the most notable changes in Mindray's revenue structure in recent years that has attracted market attention. According to the financial report, as of the first half of 2025, Mindray's overseas revenue reached 8.332 billion yuan, accounting for 50% of the total revenue. Compared with 40% at the end of 2021, the proportion has increased by 10 percentage points in more than three years.

Chart: Mindray's revenue composition (by region); Source: Wind, 36Kr

After years of development, Mindray has established a large global R & D, manufacturing, marketing, and service network in the overseas market. According to the company's financial report, as of the first half of this year, Mindray's business covers more than 190 countries and regions around the world, and it has set up 64 overseas subsidiaries in more than 40 countries. Among the 12 R & D centers established globally, 5 are overseas.

In the overseas high - end market, Mindray has covered 80 out of the world's top 100 hospitals, achieving a breakthrough in serving high - end overseas customers. Mindray's two core businesses, in vitro diagnosis (IVD) and life information and support, have maintained a momentum of continuous breakthroughs in serving high - end customers in recent years. The company's financial report shows that in the first half of 2025, the number of new high - end customers for the IVD and life information and support businesses exceeded 160 and 100 respectively.

There are mainly two core driving factors for the above - mentioned changes in Mindray's regional revenue structure:

1. The domestic revenue has declined to varying degrees in the past two years, while the overseas revenue has always maintained positive growth. As a result, the proportion of overseas revenue has accelerated its increase;

2. Through multiple mergers and acquisitions in recent years, Mindray has given play to synergies to enhance product strength and further enriched its product portfolio. Especially in the high - end medical device field, it has continued to make efforts, which, combined with its well - established overseas channels, has jointly driven the growth of overseas business revenue.

02 Does the planned Hong Kong IPO aim to strengthen the overseas market?

Considering that overseas revenue currently accounts for half of the total and has become the core engine of the company's performance growth, the potential core appeal for Mindray to launch its Hong Kong IPO is that after obtaining IPO financing in the Hong Kong stock market, it can further use the funds for business expansion in the overseas market. The specific directions include channel construction, supply chain construction, and increased R & D investment.

From the perspective of the development stage of the company and the medical device industry, the domestic market has basically completed the domestic substitution of mid - and low - end medical devices. Domestic medical device companies represented by Mindray are now moving towards high - end and ultra - high - end products. The situation in the overseas market is similar. Mindray has passed the stage of opening up the overseas market with cost - effective products and is now challenging medical device giants in the high - end market and has already broken through to some high - end customers.

One of the underlying logics for Mindray's breakthrough in the overseas high - end market is technology - driven: On the one hand, by increasing its R & D intensity, it promotes the continuous iteration of products and technologies; on the other hand, it integrates resources through mergers and acquisitions to enhance product strength and enter new tracks.

In terms of R & D, Mindray has maintained a relatively high R & D intensity, with the long - term R & D expense ratio ranging from 9% to 10%. Moreover, the long - term year - on - year growth rate of R & D expenses is in line with revenue growth. Even though the R & D expenses in the first half of 2025 showed a certain year - on - year decline, the decline was much lower than that of revenue, so the R & D expense ratio remained stable.

Horizontally, the R & D expense ratios of four multinational medical device giants, Medtronic, Abbott, Siemens Healthineers, and GE Healthcare, have ranged from 5.6% to 8.7% in the past three years. Mindray's slightly higher R & D intensity than these industry giants is one of the important foundations for it to compete with them in terms of product strength and innovation.

Therefore, the financing obtained through the Hong Kong IPO can be invested in the R & D of high - end medical equipment and cutting - edge technologies, especially in overseas R & D centers. This will not only further improve the local layout but also provide strong support for maintaining competitiveness in product innovation.

Chart: Comparison of R & D expense ratios of medical device companies; Source: Wind, 36Kr

In terms of mergers and acquisitions, Mindray's major M & A cases after 2020 include: In 2021, it acquired HyTest in Finland to solve the "bottleneck" problem of core raw materials in the upstream of consumables and improve the quality of IVD consumables; in 2023, it acquired DiaSys in Germany to further deepen the layout of IVD - related businesses, improve the overseas supply chain, and enrich product categories; in 2024, it acquired Shanghai Huatai Medical Co., Ltd., a medical enterprise listed on the Science and Technology Innovation Board, to enter the fields of electrophysiology, cardiovascular devices, and related consumables, bringing new growth points to Mindray's performance.

Looking at the development history of global medical device giants, mergers and acquisitions have always been an important way to expand into new tracks and enhance product competitiveness. It can be said that the development history of almost every global medical device giant is a history of mergers and acquisitions. From Mindray's development history, especially the key M & A cases after 2020, it is not difficult to see that it is learning from the mature paths of these device giants and perfecting its own business layout through mergers and acquisitions. Therefore, it is reasonable to infer that another purpose of Mindray's Hong Kong IPO is to reserve funds for potential mergers and acquisitions, especially cross - border mergers and acquisitions.

In addition, compared with financing in the domestic market and then investing in overseas projects, conducting an IPO in the Hong Kong stock market can, to a certain extent, reduce exchange rate risks and help optimize the financial structure.

In terms of business development potential, the overseas market still has huge penetration potential. According to the calculations of sell - side analysts, the corresponding market space for Mindray's current overseas business exceeds 450 billion yuan, while Mindray's overseas revenue in 2024 was approximately 16.4 billion yuan, with a corresponding market share of less than 4%. Combined with Mindray's current development momentum, this Hong Kong IPO will help its core business penetrate the overseas market more quickly, especially in the high - end medical device segments where it is currently making efforts.

03 Will the capital market buy it?

Looking back at history, Mindray was listed on the Growth Enterprise Market in October 2018. At that time, with a fundraising scale of 5.93 billion yuan, it set a new record for the largest IPO scale in the history of the Growth Enterprise Market. After eight years, Mindray is launching its Hong Kong IPO, and the currently disclosed target financing amount is at least $1 billion, which is approximately 7 billion yuan at the current exchange rate.

From the perspective of corporate behavior, the backgrounds of the two IPOs are significantly similar. The IPO financing in 2018 was mainly used for capacity expansion, R & D center expansion, channel expansion, debt repayment, and working capital replenishment. In short, the purpose of going public at that time was mainly for business expansion. Before this Hong Kong IPO, Mindray's series of actions, such as continuous asset acquisitions, R & D center construction, and high R & D investment, are also aimed at expanding the business by expanding the balance sheet. In this regard, the business logic of Mindray's current Hong Kong IPO is like retelling the story from eight years ago.

Looking at the differences between the two IPOs, in terms of asset quality, before the 2018 IPO, as the business expanded, the asset - liability ratio climbed rapidly, there was a certain short - term debt repayment pressure, and the reserve of monetary funds was relatively small. Therefore, one of the core goals of the IPO was to relieve the short - term debt repayment pressure. However, the financial situation before this Hong Kong IPO is relatively better. The asset - liability ratio in the first half of 2025 was only 25%, and the monetary funds were relatively more abundant, with much lower debt repayment pressure than in 2018.

In terms of the company's development situation and core appeal, in 2018, Mindray was in a period of rapid growth. While revenue growth accelerated, profits also maintained high growth. After privatizing and delisting from the New York Stock Exchange, it chose to list on the A - share market mainly to obtain a higher valuation. When Mindray launched its Hong Kong IPO this time, it is facing the problems of slow revenue growth and performance pressure. The core goal of the IPO is to conform to the company's strategy of strengthening its overseas business, open up international capital channels, attract overseas investors, and further enhance its popularity and influence in the international market.

For the capital market, there is no doubt about Mindray's leading position in the medical device field. The recent adjustments are mainly affected by the overall downturn in the pharmaceutical sector and the domestic medical device industry environment. With the digital and intelligent transformation of its three core businesses and continuous breakthroughs in the high - end segments of the overseas market, the technological barriers have been enhanced, and its leading position in the industry has been further consolidated. From the perspective of the company's performance expectations, the procurement of medical devices in the domestic market has significantly recovered in the first half of this year, and the momentum of continuous breakthroughs in the overseas high - end market will continue. Therefore, the inflection point of Mindray's performance expectations is relatively certain. However, considering the different development stages of the company during the two IPOs, it is boldly predicted that although the financing amounts of the two IPOs may be similar, the valuation levels will be significantly different.

Looking at the impact of the Hong Kong IPO on Mindray's A - share, after the company's stock price reached a record high in 2021, it has experienced more than three years of continuous adjustment. Although the current stock price has rebounded to some extent compared with the previous level, it is still only half of the record high. Since September this year, Mindray's average valuation has been around 31x (PE - TTM), and the five - year percentile is about 35%. Therefore, Mindray's current valuation level has a fairly good safety margin.

As we all know, the pharmaceutical sector has been continuously adjusted for more than three years, and the valuation has been reshaped, with the valuation ceiling generally lowered. For Mindray, the core logic for its PE - TTM to exceed 90 times in 2021 was that in the early stage of the epidemic, the increased demand for life information and support equipment such as ventilators drove a significant increase in performance. Against the background of short - term pressure on related domestic businesses, when judging Mindray's current safety margin from a five - year perspective, the core logic lies in the following two points:

1. The overseas business, which has a higher ceiling, has become the core growth engine for Mindray's future performance;

2. The domestic business is also expected to see an inflection point in performance in the short term.

Therefore, this Hong Kong IPO will directly help Mindray expand its overseas business, especially in terms of increased R & D investment. Relying on the strong performance expectations in the overseas market driven by technology, it will play an important supporting role in pushing up Mindray's valuation ceiling. At the domestic business level, benefiting from the obvious recovery of medical device tendering activities in the first half of this year, the domestic revenue growth is expected to turn positive year - on - year in the third quarter of this year. The positive performance expectations of the domestic business will increase the safety margin at the current valuation level.

Another core logic for pushing up Mindray's valuation ceiling is that in the current AI wave, Mindray is promoting digital and intelligent transformation, that is, building an intelligent medical ecosystem of equipment + IT + AI based on its core businesses. While enhancing technological barriers, it will also bring corresponding technological premiums to its valuation.

*Disclaimer:

The content of this article only represents the author's views.

The market is risky, and investment should be made with caution. Under no circumstances do the information in this article or the opinions expressed constitute investment advice to anyone. Before making an investment decision, if necessary, investors must consult professionals and make decisions carefully. We have no intention to provide underwriting services or any services that require specific qualifications or licenses for the parties involved in the transaction.