Mindray Medical A-Share IPO Approved, Aims to Raise RMB 6.34 Billion and Challenge ChiNext IPO Record

VCBeat (WeChat ID: vcbeat) has learned that on July 24, Mindray Medical, the leading Chinese manufacturer of medical devices, successfully passed the IPO review meeting, positioning it to potentially challenge the record for the largest IPO fundraising on China’s ChiNext board.

According to Mindray Medical’s most recently updated prospectus in May, the company plans to issue no more than 122 million shares, with the proceeds allocated to eight projects, including the repayment of bank loans and supplementation of working capital, and the upgrade of its marketing and service system.The planned investment of the raised funds is RMB 6.34 billion.

This means that Mindray Medical is poised to surpass the previous record for the highest capital raised on the ChiNext board, which was set by CATL at RMB 5.46 billion (note that CATL’s final IPO fundraising amount was below RMB 5.46 billion).Industry insiders predict that once Mindray Medical successfully lists its shares, it is expected to become another company with a market capitalization of over RMB 100 billion on the ChiNext board. Mindray has also become the latest company approved to delist from the United States and return to China, following 360 and WuXi AppTec.

Mindray Medical was established in 1991, with its headquarters located in Shenzhen. The company is primarily engaged in the research and development, manufacturing, marketing, and servicing of medical devices, committed to providing high-quality products and services to healthcare institutions worldwide. Mindray has 57 wholly-owned or controlled subsidiaries globally, including 18 within China and 39 across North America, Europe, Asia, Africa, Latin America, and other regions.Its product portfolio spans three major sectors: Patient Monitoring & Life Support, In Vitro Diagnostics (IVD), and Medical Imaging. 

Data show that Mindray Medical recorded operating revenues of RMB 8.011 billion, RMB 9.032 billion, and RMB 11.174 billion in 2015, 2016, and 2017, respectively, with corresponding net profits attributable to shareholders of the parent company amounting to RMB 910 million, RMB 1.6 billion, and RMB 2.589 billion. The company’s net profit increased by 62% year on year last year.

Data Source: Mindray's Prospectus

Since its establishment in 1991, Mindray has been dedicated to the research, development, and manufacturing of clinical medical devices. Its product portfolio spans four key areas: Patient Monitoring & Life Support, In-Vitro Diagnostics, Digital Ultrasound, and Medical Imaging, delivering medical electronic products that perfectly balance performance and cost to every corner of the world.

To date, Mindray’s global sales have expanded to more than 190 countries and regions.In China, nearly 110,000 medical institutions and over 99% of Grade A tertiary hospitals are using Mindray’s equipment. Overseas, according to media reports, Mindray accounts for one in every five newly purchased patient monitors and one in every eight anesthesia machines in U.S. operating rooms, while Mindray ultrasound ranks among the top three in the U.S. point-of-care (POC) market.

Therefore,It appears that,Mindray Medical is truly a well-deserved unicorn in China’s medical device industry.

Mindray operates production centers in Shenzhen and Nanjing, with a total area exceeding 300,000 square meters. Adhering to lean manufacturing principles and characterized by high-mix, low-volume production, the company is able to meet diverse customer demands while complying with stringent regulatory requirements across multiple countries, thereby delivering high-quality products to the global market.

Mindray has nearly 80 products that have obtained U.S. FDA 510(k) market clearance, reaching approximately two-thirds of healthcare institutions in the United States. Its manufacturing centers have repeatedly passed rigorous on-site comprehensive audits conducted by the U.S. FDA with high-quality performance. Whether it involves regulatory approvals for multiple international markets, core technologies harnessing extensive intellectual expertise, or material control, intelligent scheduling, and warehouse management, Mindray employs stringent testing to ensure the reliability and safety of its products in clinical use across diverse environments.

Since 2008, the company has been establishing a global R&D platform. In 2008, Mindray acquired the patient monitoring business of Datascope in the United States, integrating advanced global technologies and innovation capabilities to become the third-largest brand in the global patient monitoring market. In 2013, Mindray further acquired Zonare, a U.S.-based leader in high-end color Doppler ultrasound technology, gaining access to Zonare’s cutting-edge Sonography(TM) zone imaging technology. This technology replaces traditional line-by-line scanning by acquiring echo information on a zonal basis, reducing ultrasound scan time by 90%.

To date, Mindray has established R&D centers in New Jersey, Seattle, and Silicon Valley in the United States, as well as in Beijing, Shenzhen, Nanjing, Xi’an, and Chengdu in China. By actively integrating global resources, the company engages in product planning to deliver more leading healthcare solutions. Currently, Mindray launches over 10 new products annually, with each new product incorporating at least 10 patented technologies on average.

Although Mindray Medical is the leading enterprise in China's medical device industry, its path to going public was not smooth.

In fact, as early as 2006, Mindray Medical listed on the New York Stock Exchange (NYSE) through its U.S.-listed platform, Mindray International. On March 6, 2016, Mindray Medical announced the completion of its $3.3 billion privatization and delisting, returning to the domestic market in pursuit of higher valuations on China’s A-share market.

On May 26, 2017, Mindray Medical disclosed its prospectus for the first time in China, but voluntarily applied to terminate the review on February 13, 2018. More than a month after terminating its IPO, Mindray released its IPO prospectus again at the end of March 2018, and subsequently updated the prospectus this May. The company had initially planned to list on the SME Board, later switching to the ChiNext Board, with the fundraising scale slightly reduced from RMB 6.626 billion to RMB 6.34 billion.

Amid the ongoing US-China trade war, Mindray Medical, as the leading domestic medical device manufacturer, is undoubtedly at the forefront of the storm. According to Mindray’s prospectus, overseas revenue has accounted for approximately half of the company’s total income over the past three years. Fluctuations in the RMB exchange rate and escalating US-China trade frictions are likely to adversely affect the company’s sales. Notably, products exported by the company to the United States—including patient monitors, color Doppler ultrasound systems, anesthesia machines, and related accessories—were included in the US administration’s earlier list of proposed tariff increases.

In this regard, the company also candidly admitted in its May prospectus,“If the United States imposes a 25% tariff on Chinese medical device products, and the Company is unable to pass the costs on to downstream customers, it may have a certain negative impact on the profit margins of the Company’s products sold in the United States.”

Amid numerous challenges and difficulties, Mindray Medical has finally made ample preparations and made a strong debut on the ChiNext board. We also see hope for domestically produced medical devices.