Against the backdrop of the continuous growth in demand in the global medical device market, one phenomenon that cannot be ignored is that medical device companies, especially leading companies, are using external mergers and acquisitions to quickly seize market opportunities and further enhance performance.

Learning from the century-long growth path of global medical device giants, it can be seen that mergers and acquisitions are a necessary path for companies to achieve rapid growth and industry leadership. According to incomplete public data statistics, foreign-funded medical device companies have completed 12 mergers and acquisitions since 2024, totaling approximately 168.59 billion yuan, covering key areas such as cardiovascular intervention, stroke prevention, and AI technology.

In simple terms, mergers and acquisitions activities not only represent strategic layouts at the enterprise level, but also the globalization of competition and cooperation in the entire medical device industry. They not only accelerate the exchange and integration of technologies but also promote the optimization of industry resources allocation, injecting new vitality into the global medical device industry's development. At the same time, these merger cases have brought new changes to the industry's competitive landscape internally, prompting companies to focus more on innovation and differentiation to adapt to the increasingly fierce market competition.

Focusing on the domestic market, 'medical device leader' Shenzhen Mindray Bio-Medical Electronics started global mergers and acquisitions as early as 2008, achieving a qualitative leap in core technology mastery, global marketing platform construction, supply chain platform optimization, and the expansion of new business areas. The efficiency, target quantity, and integration depth of mergers and acquisitions have reached a leading level among domestic peers.

This may provide some ideas and directions for the development of major domestic medical device companies.

High-quality mergers and acquisitions quickly empower, solidify global expansion capabilities.

Mindray Medical has always been continuously enriching and improving its business map through 'high-quality mergers and acquisitions + independent innovation' around the three major product lines of life information and support, in vitro diagnostics, and medical imaging, with mergers and acquisitions projects numbering over a dozen.

Just looking at Mindray Medical's actions after its listing on the A-share market, the three mergers and acquisitions projects have filled the company's gaps in technological breakthroughs, overseas supply chains, and the expansion of business lines, laying a solid foundation for its gradual growth into a leading company in the industry.

For example, in the field of in vitro diagnostics, the ability to independently research and produce reagent raw materials is crucial. In order to further consolidate the product competitiveness of the chemiluminescence business, Shenzhen Mindray Bio-Medical Electronics acquired the globally renowned IVD raw material supplier Haipai Biological in cash, realizing independent and controllable core technology in the field of chemiluminescence raw materials, as well as full industry chain technological coverage from biological raw materials to reagent products. As a result, the company is able to not only expand the performance advantages of myocardial markers, but also launch a batch of innovative raw material products in areas such as thyroid function, hormones, and infectious diseases, in order to promote reagent technology innovation and product transformation.

At the same time, addressing the issue of the lack of overseas supply chain platforms, the company acquired 75% of DiaSys in cash. By gradually introducing and improving the supply chain platform of overseas in vitro diagnostic businesses such as hematology, biochemistry, and chemiluminescence through DiaSys, the company strengthens the construction of overseas localization production, warehousing, logistics, and service capabilities, laying a solid foundation for the comprehensive internationalization of in vitro diagnostic business. Currently, DiaSys has incorporated three localized production and delivery platforms in Europe, Asia-Pacific, and Latin America into the company's global supply and delivery plan and overall management, comprehensively enhancing the company's comprehensive competitive strength in the international IVD business.

In addition, recognizing the vast market space and faster industry growth in the cardiovascular field, in order to enter into the high-value consumables sector such as cardiovascular track with a large investment of 6.652 billion yuan, Shenzhen Mindray Bio-Medical Electronics officially entered the cardiovascular arena by acquiring Apt Medical Inc., enhancing the product matrix.

Source: Company overview

This dual-strategy approach not only drives the company to continuously expand market space but also propels steady growth and achieves performance that exceeds the industry average level.

According to the company's latest released third quarter report for 2024, in the first three quarters, the company achieved a total revenue of 29.48 billion yuan, an 8.0% year-on-year growth; achieved a net income attributable to the parent company of 10.64 billion yuan, an 8.2% year-on-year growth, with a growth rate of 11% after excluding the impact of exchange gains and losses; achieved a net cash flow from operating activities of 11.07 billion yuan, a 42.5% year-on-year growth.

It is worth mentioning that the company also announced the second interim dividend plan for 2024, intending to distribute a cash dividend of 16.5 yuan (tax included) for every 10 shares to all shareholders, with an estimated cash dividend of 2 billion yuan. Looking ahead, since its IPO in 2018, Shenzhen Mindray Bio-Medical Electronics has implemented a dividend policy for 6 consecutive years. Including the planned implementation of the second interim dividend for 2024, the total cumulative dividend will reach 31.72 billion yuan (including the repurchase of shares of 2 billion yuan), making it one of the few listed companies in the market that can maintain stable high dividends for multiple years.

Policies stimulate M&A vitality, while a broad market provides a growth foundation.

Of course, Shenzhen Mindray Bio-Medical Electronics also stated that the future merger and acquisition path will continue. The company will actively explore external M&A integration opportunities while tightly focusing on internal R&D innovation, accelerating the mastery of core technologies, ensuring a solid supply chain, and gaining more market share.

From the macro perspective of the entire industry, on the one hand, policy support has brought great imagination space for leading medical equipment companies like Shenzhen Mindray Bio-Medical Electronics in terms of outbound mergers and acquisitions.

Since 2024, the country has implemented a series of measures to activate the M&A and restructuring market, including the new 'Nine National Policies,' 'Eight STAR Market Policies,' 'Six M&A Policies,' as well as the brokerage seminar at the Shanghai Stock Exchange. All are encouraging listed companies to focus on their main businesses and integrate the industry chain upstream and downstream through M&A restructuring, thereby enhancing industry synergies.

On the other hand, the essence of long-term medical demand, driven by technological progress and population aging, has not fundamentally changed. These two factors combined have kept the global medical equipment market on a path of sustained and stable growth, with industry growth logic remaining robust.

With the worsening global aging trend and the continuous pursuit of high-quality medical resources, the market size of the medical equipment industry is expanding. According to data compiled by the Shenzhen Medical Equipment Industry Association, the global medical equipment market size reached $595.2 billion in 2023, with an expected growth to $743.2 billion by 2027, at a compound annual growth rate of 5.71%. This anticipated growth not only demonstrates the broad prospects of the medical equipment market but also reflects the industry's proactive response to future technological advancements and changes in population structure.

Against the backdrop of sustainable market demand growth, seizing market opportunities quickly in competition with international giants and by accelerating the acquisition of more core technologies, strengthening core business, exploring new business areas, and solidifying industry chain strength through M&A will be one of Shenzhen Mindray Bio-Medical Electronics' long-term strategic approaches for future development. Even as a leading domestic medical equipment company, Mindray, in its thirties, still relatively young compared to international giants with centuries of development history. Mindray's revenue scale is also less than 15% of its counterparts. The growth path of its expansion and strengthening in the future is worth market expectations.