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Mindray Medical International Limited Message Board

  • notfoolinus notfoolinus Feb 26, 2013 10:21 PM Flag

    Great Questions On Today's Earnings Call's - Pregnant Pause and Alot of Stumbling in Response

    Wei Du - Goldman Sachs

    Hi, this is Wei. I guess I am pretty impressed about the gross margin that the first question I think, Alex you guided, you tried to maintain 2013 margin at similar level and I think that probably sets company’s confidence, management confidence on the new product launch and I think that’s one of my assumptions. I think increasing reagent sales and optimizing product mix make a significant contribution, so whether you can confirm that?

    I think the second question is a bit more direct and Alex and Jie, I am not sure whether you can provide more color. I guess, I want to give you some [the factors]; obviously, everybody is concerned about the previous FDA warning letter and how much that’s going to impact your North America business. I understand North America contribution to the earnings is quite small, but I think we want to know what will be the potential impact or if you can give any color what the management has to address in terms of like say the GMP centered and also Alex I am not sure this is too sensitive, whether you can give a bit color on the potential law suit with [Masimo] your supplier, I am pretty sure everybody want to ask that question, I happen to be the one to speak up? Thank you.
    Alex Lung - CFO

    Hi this is Alex. I may be answer one of the finance related questions and then I will pass it to Jie to the other operating related questions.
    Wei Du - Goldman Sachs

    Okay. Thank you.
    Alex Lung - CFO

    Yeah, it’s quite a number of questions in working there. May be I just……
    Jie Liu - COO

    It is a pretty challenging question, including so many (inaudible) different perspective of the business….
    Wei Du - Goldman Sachs

    I know, I know, I am sorry.
    Jie Liu - COO

    Too many; let’s say just squeeze one by one for the Masimo case, that’s ordinary case, right. When you do the business in the medical field, specifically in the medical technology, there are the many different...
    Wei Du - Goldman Sachs

    Okay. First on the first one, I am sure just the margins, obviously 2012 full year margin have been quite strong and I think if you can give us a bit fundamental reason why it’s so strong and then whether you are confidence that’s going to be sustainable?
    Jie Liu - COO

    For the margin I’ll move to Alex.
    Alex Lung - CFO

    For the margin part I think the key achievement of what we have done this year is that on the overall control of the pricing and control of the discount is one of the key drivers for the achievement supported by our continuous improvement in cost structure from our supply chain and manufacturing. Those two couples one of the key improvements in our overall margin expansion. And this year in particular, we have seen more efficiency gain coming from our service business especially we have also achieved good result on China, so that also actually help us in the overall improvement in margin as well.

    And you mentioned earlier in your question about the mix, in this year I think we have a very good achievement from the increased in the Asian sales as a proportion of total IVD sales. This actually help us to expand more of our revenue stream been to consumable related aspect and that effectually a more sustainable revenue.

    I think one of the factors other than the IVD have a very, very good growth in this year, I think our other sector is also growing at a double digits, so that also overall help us to improve the overall economy of scale that can achieve a better margin.
    Wei Du - Goldman Sachs

    Thank you. Jie I think in my second question a little bit brief actually I think you know everyone is want to know big color on the FDA warning letter and the potential impact to, I guess you can give us scenario now just or maybe how many trend would adjust that would that affect your, let's say operating margins things like that basically, what is going to be our major concern?
    Jie Liu - COO

    I think everybody know that FDA onsite audit is normal practice for every device company who apply for their (inaudible) the FDA approval. So for us it’s the same so every two years they are mollified onsite audit. So that's a normal process but the way they do their audit is they have their different audit or probably have a different interpretation regarding the standard regarding the terms the FDA require.

    I think we are very consistent to provide the high quality product and a very good compliant system, its compliant with FDA requirements. When they see there are different explanations of the requirement, we are very corporative to meet the new standards, the new requirements because now it is that the auditors pushing to the device manufacturer to the pharmaceutical standard. So the other way we working together with FDA auditors, FDA officials to make sure we provided the high quality products to make sure we care about patient safety and the quality of care. So that's what we are doing, that's a normal situation.

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    • I agree that her question could have been more cogent, but at least she had the courage to ask some tough questions about the FDA, SEC and Massimo.

      What's really interesting is that the transcript does not reflect the fact that the pause was so long after her question that she felt obliged to ask if anyone was still on the call. Management's bumbling non-answer is really the answer - where there's smoke there's fire.

    • Great questions. Really.??? You've heard it, her question(s) is super convoluted. I am confused. All she wants to know is how the management is handling the FDA warning letter and the impact. All of the analysts line of questioning are moronic, they either asked super convoluted questions or have a long monologue. Why? Keep it simple stupid.

      The management's answers are not any better, I think they answered 50% of the questions and they rest....are just filling the air.

 
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