In the first half of 2024, leading domestic medical equipment companies listed on the stock market achieved rapid growth in overseas revenue, with overseas markets becoming a new engine for growth.

The secrets to their successful overseas expansion can be attributed to a clear internationalization strategy, a focus on both independent innovation and external acquisitions, and the establishment of a global marketing and service network.

The internationalization potential for leading medical equipment companies remains vast in the future.

In recent years, China's medical device industry has developed rapidly, with continuous progress in technological innovation, product quality, and market services, accelerating the "going global" of Chinese medical device companies.

At the same time, the global medical device market is enormous, with developed countries like Europe and the United States experiencing a continuous increase in demand for high-quality medical devices.

Emerging markets such as Southeast Asia, South America, and Africa also show significant market potential, providing a broad space for development for domestic medical device companies.

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Against this backdrop, leading domestic medical equipment companies listed on the stock market have all delivered impressive overseas performance in the first half of 2024.

Among them, Mindray Medical achieved overseas revenue of 7.906 billion yuan in the first half of the year, a year-on-year increase of 18.09%, and United Imaging Medical achieved overseas revenue of 933 million yuan, a year-on-year increase of 29.94%.

The overseas revenue contribution ratio of the two companies in the first half of the year has reached 38.51% and 17.5% respectively, and the future growth space overseas is still very broad.

Mindray Medical, which has seen rapid overseas growth, is mainly engaged in the research and development, manufacturing, marketing, and service of medical devices, with its products covering four major fields: life information and support, in vitro diagnostics, digital ultrasound, and medical imaging.

The company went public in October 2018, with the first public offering of A shares of 121 million shares, an issue price of 48.8 yuan per share, and a total fundraising amount of 5.93 billion yuan, which was the largest IPO in the history of the Growth Enterprise Market.

As of September 6, 2024, the stock price of Mindray Medical was 250.8 yuan, with a total market value of 304.08 billion yuan, firmly holding the leading position among listed companies in the medical device field of A shares.

On August 30, Mindray Medical released the mid-year report for 2024, with the company achieving a business income of 20.531 billion yuan, a year-on-year increase of 11.12%; net profit of 7.561 billion yuan, a year-on-year increase of 17.37%; and net profit excluding non-recurring gains of 7.38 billion yuan, a year-on-year increase of 16.39%.

From a regional perspective, Mindray Medical's domestic revenue in the first half of 2024 was 12.624 billion yuan, a year-on-year increase of 7.16%, and overseas revenue was 7.906 billion yuan, a year-on-year increase of 18.09%.

It can be seen that the overseas market was the main driver of revenue growth in the first half of the year, with the proportion of overseas revenue in total revenue increasing by 2.28 percentage points to 38.51% year-on-year in the first half of 2024.

The growth momentum of Mindray Medical's overseas market mainly comes from the two major segments of life information and support business and in vitro diagnostics.

Overseas, the procurement demand of the market has basically recovered in the first half of the year, thanks to the product competitiveness that has reached a world-class level, the company's life information and support business has accelerated the penetration of high-end customer groups, and has entered more high-end hospitals in countries such as the United States, the United Kingdom, France, Spain, Australia, Brazil, Mexico, Turkey, and Saudi Arabia.

The overall product and digital solution advantages continue to expand, driving the international life information and support business to achieve double-digit growth in the first half of the year.

In addition, Mindray Medical has also accelerated the construction progress of local platform capabilities such as production and manufacturing, logistics distribution, clinical support, and IT services in the overseas in vitro diagnostic market through mergers and acquisitions and self-built methods.

The merger and integration of DiaSys has progressed smoothly, and the penetration speed of overseas medium and large sample volume customers is still accelerating.

In the first half of the year, it successfully broke through more than 60 overseas third-party chain laboratories and completed the installation of the first MT8000 production line, promoting the international in vitro diagnostic business to grow by more than 30% in the first half of the year.

As the second-largest company in the medical device field, United Imaging Medical has also achieved rapid growth in overseas markets.

United Imaging Medical was established in 2011, dedicated to providing global customers with high-performance medical imaging equipment, radiotherapy products, life science instruments, and medical digitalization and intelligent solutions.

The company went public on the Science and Technology Innovation Board in August 2022, with the first public offering price of 109.88 yuan per share, and the number of shares issued was 100 million shares, with a total fundraising of 10.988 billion yuan.

As of the close on September 6, the company's stock price was 102.75 yuan, with a total market value of 84.7 billion yuan.

On August 31, United Imaging Medical released the mid-term report for 2024, with the company achieving a business income of 5.333 billion yuan, an increase of 1.18% year-on-year, a net profit of 950 million yuan, an increase of 1.33% year-on-year, and a net profit excluding non-recurring gains of 798 million yuan, an increase of 1.39% year-on-year.

From a regional perspective, United Imaging Medical's domestic market revenue in the first half of 2024 was 4.401 billion yuan, a year-on-year decrease of 3.36%, and the international market revenue was 933 million yuan, a year-on-year increase of 29.94%, with the international market revenue accounting for 17.5%, an increase of nearly 4 percentage points year-on-year.

It can be seen that the growth in the first half of the year mainly relied on the contribution of the international market.

In the first half of 2024, United Imaging Medical's various product lines performed well in the international market, with significant growth in the order volume and revenue of MR equipment and XR equipment, and CT equipment and MI equipment also maintained steady growth.

After the global public health crisis, the market demand for MR equipment continued to be strong; the company's layout in the diagnostic XR and interventional DSA product lines continued to improve, and the product combination capabilities and market competitiveness continued to enhance, and the recognition of XR equipment in the global market gradually increased.

It is worth mentioning that United Imaging Medical successfully entered the French market in the first half of 2024, and the ultra-high-definition optical fiber digital PET/CT equipment has been successfully installed in a well-known French nuclear medicine center, marking the first breakthrough of large domestic high-end medical equipment in the French market and becoming an important milestone for the company to expand the Western European and international markets.

In the Americas, United Imaging Medical's digital PET/CT equipment has also successfully entered the National Children's Hospital of Mexico.

In India, the company's 100th uMR 580 magnetic resonance imaging system was successfully installed in the central and southern regions of India, becoming an important moment in the company's expansion process in the Indian market.

Over the past three years, the company's MR, CT, and PET/CT equipment have been among the top in terms of new market share in India.

In addition to 2024, the overseas markets of the two medical equipment leaders have also performed well in previous years.

According to the statistics of Caixin Securities, Mindray Medical's overseas revenue annualized growth rate reached 13.59% from 2014 to 2023.

In the first half of 2024, Mindray Medical's overseas revenue accounted for 38.51%, and the contribution of overseas markets to growth is becoming more and more important.

Now, Mindray Medical has become the only company on the global top 50 medical device list with its headquarters in a developing country.

According to the statistics of China Merchants International, United Imaging Medical's overseas revenue compound annual growth rate reached 121.8% from 2019 to 2022, and the overseas revenue accounted for 3.3% to 11.7%.

United Imaging Medical achieved overseas revenue of 1.678 billion yuan in 2023, a year-on-year increase of 54.72%, and the overseas revenue accounted for 14.7%, and in the first half of 2024, it further increased to 17.5%.

Compared with Mindray Medical, although United Imaging Medical's overseas revenue accounts for less than the former, the internationalization achievements in recent years are also very significant.

Decrypting the path to going global, Mindray Medical, as the most successful representative of international medical devices, its path to going global is worth summarizing and learning from.

Mindray Medical's internationalization strategy began in 2000, and since then, it has actively expanded the global market.

In the process of more than 20 years of internationalization, the company's internationalization strategy has gone through three stages.

Caixin Securities summarizes these three stages as "going out," "going in," and "going up."

In the early stage of overseas market expansion, Mindray Medical mainly built overseas agency channels and pushed high-cost-effective products that had been iterated and optimized domestically for ten years to overseas developing countries and basic clinical markets in developed countries, thus quickly opening up overseas growth space and achieving product "going out."

In the mid-expansion stage, Mindray Medical set up subsidiaries or offices in overseas markets and gradually established a marketing team.

At the same time, it successfully went public on the New York Stock Exchange, which further increased the acceptance of the company and its products in the overseas mainstream market, achieving the company "going up."

In the later stage of expansion, Mindray Medical carried out a series of mergers and acquisitions of high-end market targets in European and American countries, mainly aiming to obtain technical resources, successfully achieving the high-end of the company's important products such as monitors and ultrasound, enhancing its competitiveness in the high-barrier, long R&D cycle of high-end equipment, and taking this opportunity to successfully break through the international high-end market, achieving the company "going up."

In the process of achieving the goals of the internationalization strategy, Mindray Medical has always placed R&D innovation at the core position, continuously improving product competitiveness through technological breakthroughs and product optimization.

Its rich product line covers multiple medical fields, providing high-quality products and technical solutions for medical institutions worldwide.

Since its establishment, Mindray Medical has attached great importance to the construction of the R&D system and has always maintained high investment in R&D innovation.

In 2023, the company's R&D investment reached 3.779 billion yuan, a year-on-year increase of 18.43%.

At present, the company has established a global resource-based R&D innovation platform with strong product engineering and system integration capabilities, with twelve major R&D centers and a total of 4,897 R&D engineers distributed around the world.

Galaxy Securities stated that the medical device fields that Mindray Medical is involved in, such as monitoring, ultrasound, blood cells, and chemiluminescent immunoassay, have a large market capacity, but the technical paths have become increasingly mature after 30-40 years of development.

Mindray has achieved from catching up, to running side by side, and finally leading through continuous R&D investment, with high-end products gradually approaching or even surpassing existing similar foreign-funded products.In the 2023 ranking of the world's TOP 100 hospitals by the U.S. News & World Report, Mindray has covered 80 of them, proving the company's ability to compete with the world's top medical device companies in the global market.

According to Mindray's statistics, the company's patient monitors, anesthesia machines, ventilators, defibrillators, hematology analyzers, and ultrasound equipment maintained a top three position in the global market share in the first half of 2024.

In the medical device industry, independent research and development and external mergers and acquisitions are both important ways to build industrial chain strength and enhance core competitiveness.

Therefore, mergers and acquisitions have always played an important role in Mindray's internationalization process.

Since Mindray started its global M&A journey in 2008, key overseas acquisitions include: in 2008, the company acquired Datascope's life information and support business in the United States, and the Swedish respiratory gas monitoring brand ARTEMA; in 2013, the company acquired the high-end ultrasound imaging manufacturer Zonare in the United States and ULCO's distribution network in Oceania; in 2021, it acquired the IVD raw material manufacturer Hytest; in 2023, it acquired the IVD supply chain platform DiaSys.

These acquisitions have greatly enhanced Mindray's core technology, marketing platforms, and supply chain platforms, as well as the expansion of new businesses.

Mindray has been continuously building and consolidating its global R&D, marketing, and supply chain platforms, while accumulating rich M&A experience, leading the domestic peers in M&A efficiency, the number of targets, and especially the depth of integration, gaining industry M&A integration experience and capabilities beyond peers.

Especially since its listing on the domestic capital market in 2018, Mindray has carried out a series of important mergers and acquisitions, continuously exploring new business areas, looking for larger-scale, long-term, and sustainable growth space, and accelerating the construction of localized operation platforms in overseas markets in combination with the needs and characteristics of overseas markets.

On the basis of building hard power through independent research and development and mergers and acquisitions, Mindray also pays great attention to the construction of the global marketing network.

Benefiting from more than 20 years of international expansion, Mindray has built a global marketing network covering more than 190 countries and regions, has established a global platform advantage, and continues to expand the layout of global localization networks and global layout, comprehensively strengthening overseas localization production capacity, improving market adaptability and clinical service levels, and actively seizing the opportunities of new infrastructure in the global medical market.

As of December 31, 2023, Mindray had 4,578 marketing personnel.

The company has subsidiaries in about 40 countries and regions abroad, and its products are sold in more than 190 countries and regions.

The company has become a long-term partner of leading medical institutions in the United States, the United Kingdom, Italy, Spain, Germany, France, and other countries.

At the same time, the company continues to strengthen the construction of localized teams, among the employees responsible for overseas business, the proportion of foreign employees is 81.68%, and in 29 countries, the team is composed of local employees.

As of the first quarter of 2024, Mindray had more than 100 direct service sites and developed more than 2,000 service channel merchants in more than 190 countries and regions, training more than 10,000 channel service personnel to obtain Mindray-certified service qualifications.

It is precisely because of the high-quality products and perfect service that Mindray continues to accelerate breakthroughs in the public markets and high-end customer groups of various countries.

While continuously breaking through the high-end customer groups, it has increased customer stickiness, strengthened customer relationships, established a trustworthy and high-quality global brand image, and laid a solid foundation for the penetration of more products.

In the first half of 2024, in the field of life information and support, Mindray broke through nearly 40 new high-end customers, and including nearly 130 existing high-end customers, more products achieved horizontal breakthroughs.

The in vitro diagnostic product line broke through nearly 140 new high-end customers, and in addition, nearly 60 existing high-end customers achieved horizontal breakthroughs in more products; among the nearly 200 high-end customers broken through during the reporting period, there were also 61 third-party chain laboratories.

The medical imaging product line broke through nearly 60 blank high-end customers, and more than 40 of the blank high-end customers that have been broken through have achieved repeat purchases.

For United Imaging, its 2024 mid-year report summarizes that since entering the international market for more than 6 years, the company has rapidly improved customer satisfaction, brand influence, and market share in the international market with highly competitive innovative solutions, stable and reliable product quality, and professional and efficient services.

As of the end of the report period, the company's business has covered more than 70 countries and regions in Asia, the Americas, Europe, Oceania, Africa, and other places.

The future is still broad.

Mindray and United Imaging, as pioneers of domestic medical device internationalization, still have huge potential for overseas market growth.

The overseas growth space is first derived from the continuous expansion of the global market.

With the improvement of economic levels and the enhancement of medical care awareness, as well as the continuous acceleration of population aging, the demand for medical care among residents worldwide has increased significantly, and medical expenditures have increased year by year.

Especially in recent years, countries around the world have significantly realized that there are shortcomings and deficiencies in the prevention and control mechanisms of major infectious diseases and the emergency management systems of public health, and have started a wave of new medical infrastructure construction, and the scale of the medical device market continues to expand.

According to data compiled by the Shenzhen Medical Device Industry Association, the global medical device market scale was $595.2 billion in 2023 and will continue to grow at a compound annual growth rate of 5.71%, reaching $743.2 billion by 2027.

Developed countries, thanks to their advanced medical systems and higher personal health awareness, have per capita medical device costs far exceeding $100, forming a huge consumer market, with the European and American markets accounting for about 70% of the global medical device market.

At the same time, the economic growth of developing countries has increased the consumption capacity of its residents, supporting the continuous growth of the global medical device market.

Faced with the continuous expansion of the global market, Mindray's 2024 mid-year report stated that the company will continue to quickly enter new tracks and master new technologies through internal and external extensions, while leveraging the synergy between various product lines, to continue to grow and strengthen, enhance the accessible market space, and promote the company to maintain sustainable and high-quality development in the changing global market pattern.

United Imaging's 2024 mid-year report stated that it will continue to deepen the expansion of the international market, focusing on high-growth areas and potential markets, and further consolidate and enhance the company's competitiveness in the global market by strengthening localized operations, improving service quality, and increasing product innovation.

In addition to the expansion of the global market, the overseas growth space of the two medical equipment leaders will also come from the increase in market share.

According to Mindray's statistics, the company's business layout corresponds to an accessible market space of about 570 billion yuan internationally, and the company's international revenue in 2023 was about 13.5 billion yuan, with a market share of only a low single digit, far lower than the company's market share of about 20% in the domestic market.

Among them, the company estimates that the accessible market space in overseas developing countries is similar to that in China, both about 130 billion yuan, and the company's revenue in developing countries in 2023 was only about 8.8 billion yuan, with a market share of less than 7%.

If the accessible market space brought by entering the cardiovascular business is added, the market share level will be even lower.

Under the trend of the industry's continuous rapid expansion, the company's business layout still has a huge growth space in the global market, especially in developing countries outside of China.

Mindray's announcement on the action plan for the double improvement of quality and return on February 18, 2024, based on the optimistic view of the future development of the industry and the company's prospects, the company has the ability and confidence to enter the top 20 global medical device list by 2025, and to make an impact on the top 10, or even higher industry status.

Looking at the global market ranking, according to Wind's use of the latest fiscal year income data of global medical device industry listed companies as of the end of 2023 (involving large group companies with diversified businesses, only the medical device business income is used for participation in the ranking), Mindray's ranking in 2020, 2021, 2022, and 2023 was 36th, 31st, 27th, and 23rd, respectively, with the ranking improving year by year, constantly moving towards the goal of the top 20 global medical devices.

At the same time, compared with the world's top medical device giant with a century of history, the company's operating income in 2023 was only 15% of the other party, and there is still a big gap and development space.

Galaxy Securities believes that after many years of deep cultivation in the overseas market, Mindray has become a medical equipment and solution provider with business in most regions of the world.

Currently, the company has more than 50 subsidiaries in 40 countries/regions, and its products have been sold in more than 190 countries/regions, and has established a global resource allocation-based R&D innovation platform, forming a huge global R&D, marketing, and service network.

Starting from 2024, Mindray's international business is expected to accelerate growth and further move towards a leading position in the global medical device industry.

For United Imaging, the global market size of medical imaging equipment in which it is located has reached $45.8 billion in 2021.

United Imaging's overseas revenue in 2023 was only 1.678 billion yuan, and there is a broad space for the increase of overseas market share.

In the 2023 fiscal year, GE Healthcare's non-China revenue was $16.77 billion (equivalent to 119.38 billion yuan), and Siemens Healthcare's non-China revenue was 18.86 billion euros (equivalent to 147.48 billion yuan), accounting for 85.8% and 87.0% of the two companies' revenue, respectively.

However, United Imaging's non-China revenue in 2022 was only 1.678 billion yuan, accounting for 14.7% of the revenue, with huge growth potential.

China Merchants Securities believes that the income region distribution of foreign-funded manufacturers reflects that the overseas market is still the main battlefield for competition in the medical imaging equipment market.

Going abroad is the necessary path for United Imaging to grow into a global leading medical imaging equipment manufacturer, and the overseas market will become an important driving force for United Imaging's long-term growth.

(Note: This translation is an abridged version due to the length of the original text.

)From a global perspective, GE Healthcare has entered over 160 countries, Philips has entered over 100 countries, and Siemens Healthineers has entered over 180 countries.

As of the end of the first half of 2024, United Imaging's medical products have successfully entered more than 70 countries and regions, including the United States, Japan, South Korea, New Zealand, Italy, and India.

Compared to foreign capital, United Imaging's internationalization process is still in a rapid catch-up phase, maintaining a high-speed growth trend.

China Merchants International believes that United Imaging has strong product competitiveness and outstanding innovation and research and development capabilities.

With the gradual improvement of overseas sales and service systems, the company's overseas business is expected to continue to grow rapidly.