1
Disclaimer
This material contains forward-looking statements with respect to the Company's anticipated operating results for 2008, the anticipated integration of the recently acquired business, the Company's geographic expansion, the Company's outlook regarding drivers, developments, and trends affecting its worldwide markets, opening of international offices, new product development and commercial launch dates, projected revenues, net income margins, earnings per share, revenue growth targets, net income growth targets, sales force and distributor targets, projections of the size of China's healthcare market, estimated government expenditures, research and development expenditure targets, the company's manufacturing development plan, and the anticipated results of its product development activities. These statements are based on information available at the time they are made and are subject to a number of risks and uncertainties. Actual results could differ materially from those anticipated by these forward-looking statements as a result of a number of factors, some of which may be beyond the Company's control. Factors that affect the Company's business operations and product development, as well as a further list and description of risks and uncertainties associated with Mindray's business, are discussed in its reports filed with the Securities and Exchange Commission, including its most recent annual report on Form 20-F. Mindray disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.
2
2Q08 Highlights
A world class competitor with strong sales & profitability growthNet revenues US$145.7 million, an increase of 99.5% YoYNet income¹ US$35.2 million, an increase of 54.4% YoY
Domestic net revenues grew over 40% for the 5th consecutive quarter2Q08 growth rate reached 59.4% in USD terms
International expansion from DPM acquisitionGained an established brand line, extensive sales networks and experienced engineers in U.S. & Western Europe from DPM acquisitionContinued international growth from integration of newly acquired direct sales network with expanding distribution network
Expanded product offerings to broaden market reachLaunched three products (BC-5300/5380, DigiEye-560T, AS-3000)
Maintained a disciplined cost focus54.8% gross margin¹, 27.5% operating margin¹ and 24.2% net margin¹
A world class competitor with strong sales & profitability growthNet revenues US$145.7 million, an increase of 99.5% YoYNet income¹ US$35.2 million, an increase of 54.4% YoY
Domestic net revenues grew over 40% for the 5th consecutive quarter2Q08 growth rate reached 59.4% in USD terms
International expansion from DPM acquisitionGained an established brand line, extensive sales networks and experienced engineers in U.S. & Western Europe from DPM acquisitionContinued international growth from integration of newly acquired direct sales network with expanding distribution network
Expanded product offerings to broaden market reachLaunched three products (BC-5300/5380, DigiEye-560T, AS-3000)
Maintained a disciplined cost focus54.8% gross margin¹, 27.5% operating margin¹ and 24.2% net margin¹
Note: 1 Non-GAAP figure - excludes impact from share-based compensation and amortization of intangible assets as defined in the Company's September 4 earnings press release and SEC filing that these slides accompany.
3
Financials – 2Q08 Results Highlights
Note: 1 Non-GAAP figure - excludes impact from share-based compensation and amortization of intangible assets as defined in the Company's September 4 earnings press release and SEC filing that these slides accompany.
USD (in millions,except EPS, A/R, A/P, Inventory days)
2Q08 2Q07 1Q08 YoY
Net Revenues 145.7 73.0 87.4 99.5%
Operating Income¹GAAP Operating Income
40.027.8
23.721.3
30.827.9
68.5%30.8%
Net Income¹GAAP Net Income
35.224.1
22.820.4
27.825.1
54.7%17.6%
Diluted EPS¹GAAP Diluted EPS
0.310.21
0.200.18
0.250.22
55.0%16.7%
Cash and Cash Equivalents 75.0
A/R Days 32 21 32
Inventory Days 57 59 64
A/P Days 50 57 68
4
Domestic
Domestic net revenues growth again exceeded 40%59.4% YoY growth5th consecutive quarter of greater than 40% growth
Growth primarily driven by:Increasing contribution from higher value equipmentIncreasing penetration in Tier 3 hospitals
Continue to build sales force and distribution channelsMR products are now in over 30,000 hospitals and clinics in ChinaDomestic sales & service headcount increased by 11% to more than 1,000 during the quarter
Continue to leverage sales and service teamsSales per head increased from US$26,070 in 2Q07 to US$30,350 in 2Q08
Domestic net revenues growth again exceeded 40%59.4% YoY growth5th consecutive quarter of greater than 40% growth
Growth primarily driven by:Increasing contribution from higher value equipmentIncreasing penetration in Tier 3 hospitals
Continue to build sales force and distribution channelsMR products are now in over 30,000 hospitals and clinics in ChinaDomestic sales & service headcount increased by 11% to more than 1,000 during the quarter
Continue to leverage sales and service teamsSales per head increased from US$26,070 in 2Q07 to US$30,350 in 2Q08
5
International
Significant beneficial effects from DPM acquisitionExperienced international growth from integration of newly acquired direct sales network with expanding distribution networkAdded 458 employees from Datascope’s patient monitoring divisionGained an established brand line, extensive sales networks and experienced engineers in U.S. & Western Europe
Continued benefit from global trendsBenefited from aging populations, healthcare affordability, increasing pricing pressure on hospitals and clinics
Well-balanced growth across geographiesContinued investment in overseas infrastructure, recruiting and localizing staff to increase awareness of the Mindray brand
Significant beneficial effects from DPM acquisitionExperienced international growth from integration of newly acquired direct sales network with expanding distribution networkAdded 458 employees from Datascope’s patient monitoring divisionGained an established brand line, extensive sales networks and experienced engineers in U.S. & Western Europe
Continued benefit from global trendsBenefited from aging populations, healthcare affordability, increasing pricing pressure on hospitals and clinics
Well-balanced growth across geographiesContinued investment in overseas infrastructure, recruiting and localizing staff to increase awareness of the Mindray brand
6
Patient Monitoring and Life Support
Net revenue (in USD millions) 2Q08 2Q07 1Q08 YoY%
$67.0 $26.0 $29.2 157.7%
Substantial patient monitoring and life support revenues added through international acquisition
Organic growth drivers:
Beneview series led growth
Domestically, higher end tier 3 hospitals contributed a higher percentage to total segment revenues
Continued strong demand in Latin America and China
Substantial patient monitoring and life support revenues added through international acquisition
Organic growth drivers:
Beneview series led growth
Domestically, higher end tier 3 hospitals contributed a higher percentage to total segment revenues
Continued strong demand in Latin America and China
iPM Monitor(4Q 2008)
Defibrillator(4Q 2008)2008 New
Product Pipeline
Expected launchNote:
All numbers include the acquisition of Datascope’s Patient Monitoring Business (“DPM”) as of May 1, 2008
7
In-Vitro Diagnostics
Net revenue (in USD millions) 2Q08 2Q07 1Q08 YoY%
$34.9 $21.5 $29.2 62.3%
Biochemistry line led growth
Reagent sales increased to 19% of the IVD product line
Launched 6 new products in first half ‘08
BS-380, a 300 T/H biochemistry analyzer, will provide significant market potential in 2009
Biochemistry line led growth
Reagent sales increased to 19% of the IVD product line
Launched 6 new products in first half ‘08
BS-380, a 300 T/H biochemistry analyzer, will provide significant market potential in 2009
2008 New Product Pipeline
BC-5300/5380 5-PartHematology Analyzer(Apr. 2008)
BS-380 Biochemistry Analyzer(4Q 2008)
5 new reagents(1H 2008)Additional reagents (2H 2008)
Start shipping
Expected launch
8
Medical Imaging Systems
Net revenue (in USD millions) 2Q08 2Q07 1Q08 YoY%
$35.4 $23.4 $26.4 51.3%
Excellent growth in Europe, the former Soviet Union, Latin America and Africa
B&W ultrasound performed well
DC-6 series ultrasound system was the largest contributor to growth
Strong pipeline of new products: DR-51
Excellent growth in Europe, the former Soviet Union, Latin America and Africa
B&W ultrasound performed well
DC-6 series ultrasound system was the largest contributor to growth
Strong pipeline of new products: DR-51
2008 New Product Pipeline
DC-3 Ultrasound (Apr. 2008)
DR-50 Digital Radiography(Jun. 2008)
DR-51(4Q 2008)
Start shipping
Expected launch
Acquisition Integration Update
10
Excellent progress to date with a focus on maintaining stability of our business
Significant opportunity to improve gross margins on DPM stand-alone monitors
Expect to achieve approximately $30 million of run-rate synergies per year in manufacturing, SG&A and R&D in 2011
Focus on leveraging DPM’s direct sales and service teams in US and EuropeTake advantage of their installed base in US hospitals and GPO relationships
Opportunity to add functionality to DPM products via MR’s efficient component sourcing and world-class R&D
Excellent progress to date with a focus on maintaining stability of our business
Significant opportunity to improve gross margins on DPM stand-alone monitors
Expect to achieve approximately $30 million of run-rate synergies per year in manufacturing, SG&A and R&D in 2011
Focus on leveraging DPM’s direct sales and service teams in US and EuropeTake advantage of their installed base in US hospitals and GPO relationships
Opportunity to add functionality to DPM products via MR’s efficient component sourcing and world-class R&D
Integration Highlights To Date
11
Outsource manufacturing to ShenzhenIdentified more than ten projects that can be re-engineered to reduce costIntegrating the purchasing function to take advantage of economic of scale
Outsource certain R&D projects to ShenzhenTook advantage of the highly skilled hardware development capability of the Shenzhen team to speed up development cycle for several major projectsTransferred certain R&D projects to Shenzhen to reduce development costs Utilized the outsourcing project management skills cumulated in Mahwah from past outsourcing projects to manage cross border teams between Mahwah and Shenzhen
Maximize cross-selling opportunitiesCombined the management of sales operations in North America and key EMEA regions to better utilize the established platform as a combined companyIdentified ways to uniformly apply service assurance to all our customers in North America
Appointed Mr. Ronald Ede as group VP of International Operations to lead the integration effort
Outsource manufacturing to ShenzhenIdentified more than ten projects that can be re-engineered to reduce costIntegrating the purchasing function to take advantage of economic of scale
Outsource certain R&D projects to ShenzhenTook advantage of the highly skilled hardware development capability of the Shenzhen team to speed up development cycle for several major projectsTransferred certain R&D projects to Shenzhen to reduce development costs Utilized the outsourcing project management skills cumulated in Mahwah from past outsourcing projects to manage cross border teams between Mahwah and Shenzhen
Maximize cross-selling opportunitiesCombined the management of sales operations in North America and key EMEA regions to better utilize the established platform as a combined companyIdentified ways to uniformly apply service assurance to all our customers in North America
Appointed Mr. Ronald Ede as group VP of International Operations to lead the integration effort
(in US millions, except EPS) 2008E 2007 YoY growth (%)
Net sales $560~580 $294 90%~97%
Gross margin (%)2 53%~54%2 55%
Net income2 $132 ~135 $88.6 49%~52%
Diluted EPS2,3 $1.16~1.18 $0.78 49%~51%
Capital expenditure $90~110 $46.2
Share-based compensation $10 $7.7
Financials -- 2008 Guidance1
1 Forecast financials as publicly provided on September 4, 2008 2 Non-GAAP figure - excludes impact from share-based compensation and amortization of intangible assets as
defined in the Company's September 4 earnings press release and SEC filing that these slides accompany.3 2008 fully diluted EPS is calculated using an estimated 114 million total shares outstanding
15
3-part Hematology
Patient Monitoring & Life Support ProductsPatient Monitoring & Life Support Products
In-Vitro Diagnostic ProductsIn-Vitro Diagnostic Products Medical Imaging SystemsMedical Imaging Systems
Time
Immunoassay
Addr
essa
ble
Mar
ket
3-Part Hematology
5-Part Hematology
Biochemistry
Addr
essa
ble
Mar
ket
B/W Ultrasound
Digital Radiography
Time
Other Imaging Products
Color UltrasoundPatient Monitoring
Devices
Anesthesia Machines
Addr
essa
ble
Mar
ket Defibrillator & Surgical
Beds and Lights
Time
30+ models currently 10+ models currently30 hematology reagents and 35 biochemistry reagents
10+ models currently
Product Roadmap
16
Leading Market Position in China
Strong Brand Recognition Brand loyalty enjoyed among domestic hospitals across ChinaHigh-quality products and customer support services
Extensive Sales Network900 sales and service staff in 29 sales and sales support offices900 exclusive distributors
Competitive Price to Performance Ratio
Around 30% discount vs. international players20% premium vs. domestic players
Sales Force ManagementLow turnover rateEffective incentive scheme
Strong Brand Recognition Brand loyalty enjoyed among domestic hospitals across ChinaHigh-quality products and customer support services
Extensive Sales Network900 sales and service staff in 29 sales and sales support offices900 exclusive distributors
Competitive Price to Performance Ratio
Around 30% discount vs. international players20% premium vs. domestic players
Sales Force ManagementLow turnover rateEffective incentive scheme
Urumchi
Shenyang
DalianBeijing
QingdaoJinan
Taiyuan
Zhengzhou
Xi’an
Lanzhou
ShanghaiNanjing
Hangzhou
Fuzhou
HefeiWuhan
NanchangChangsha
Guangzhou
Hong Kong
ShenzhenNanning
Chengdu
Chongqing
Kunming
Guiyang
Changchun
Shijiazhuang
Other11.9%
North Am erica
6.8%
Europe18.4%
Other Asia
13.5%
China49.4%
17
Revenue Breakdown by RegionRevenue Breakdown by Region
2003 Total Revenues: RMB 460 million
(US$56 mm)
2007 Total Revenues: RMB 2,231 million
(US$306 mm)
Rapidly Expanding International Presence
Other3.1%
North Am erica
7.7%Europe6.7%
Other Asia7.3%
China75.2%
2003 – 2007 CAGR2003 – 2007 CAGR
America
91.2% 73.0%44.0% 33.5% 48.4%
Other Asia EuropeOther North China Total
108.7%
18
Others15.7%
Teknova3.9%
Emperor5.2%
Aloka8.5%
Hitachie1.5%
SIUI5.8%
Landwind4.2%
Sonoscape1.6%
Toshiba2.7%
Siemens7.1%
Medison2.5%
Mindray27.8%
Sysmex14.4%
Maxco1.3%
Others4.4%
Bayer2.4%
Procan2.2%
BLT5.5%
Perlong3.1%
Tecom11.4%
NK3.9%
Beckman2.2%
ABX2.4%
Biote3.7%
Mindray43.1%
Mindray27.1%
Olympus11.2%Beckman
5.4%
Toshiba7.6%
Glamour3.5%
东软2.4%
Sinnowa5.6%
荷 威兰 图4%
BT 2.0%
Sysmex4.2%
Others8.9%
AMS2.9%
Hitachi15.6%
Leading Market Positions in China
Spacelabs2.1%
Drager3.8%
BLT1.6%
Others13.3%Glodway
3.3%
GE 13.5%
NK3.5%
Philips18.4%
Mindray40.4%
RMB 1,025mm
RMB 457mm
Patient Monitoring DevicesPatient Monitoring Devices
3-Part Hematology Analyzer3-Part Hematology Analyzer
200~400 T/H Biochemistry Analyzer200~400 T/H Biochemistry Analyzer
RMB 590mm
ource: 2007 Frost & Sullivan Report
RMB: 702mm
B/W UltrasoundB/W Ultrasound
GE13.50%
19
GE29.8%
Others4.8%Tearson
0.7%
SonoSite0.4%
Esaote3.5%SIUI
0.3%SonoScape
1.7%
Toshiba5.3% Hitachi
3.1%Aloka6.7%
Medison5.0%
Philips18.3%
Mindray4.8%
Bayer4.0%
NK8.9%
Sysmex33.8%
Others4.6%
Beckman18.2%ABX
7.9%
Abbott8.6%
Mindray13.9%
New Growth Areas in China
Mindray4.0%
Penlon2.1%
GE(欧美达)29.2%
Kontron2.5%
长峰8.9%
Kaitai3.4%
Yi'an4.3%
Others2.6%
Zhongyuan14.5% 英国百斯
0.9%
Drager24.2%
RMB 307mm
5-Part Hematology Analyzer5-Part Hematology Analyzer
ource: 2007 Frost & Sullivan Report
RMB 2,562mm
Color UltrasoundColor Ultrasound
RMB 654mm
Anesthesia MachineAnesthesia Machine Biochemistry AnalyzerBiochemistry AnalyzerHitachi16.5%
Others10.1%AMS
1.6%Caihong
2.5%Rayto1.5%
春光机长1.3%
Vital Scientific2.4%
Neusoft1.8%
Bayer1.5%
Sysmex2.1%Roche
5.8%
Sinnowa4.1%
BT 1.0%
Glamour3.8%
Abbott2.0%
Toshiba6.5%
Beckman9.7%
Olympus12.1%
Mindray14.8%
RMB 1,182mm
Siemens
15.50%