Morgan Stanley: Mindray’s third-quarter revenue growth slows: Overseas growth and new businesses offset domestic equipment weakness

How did third-quarter results compare with expectations?

In the third quarter of 2026, revenue rose 2.9% year over year, net profit fell 4.6% and recurring profit fell 1.6%, all in line with Morgan Stanley’s expectations. Excluding currency effects, the three measures grew 6.0%, 1.8% and 4.7%, respectively, showing that currency movements weighed on growth rates measured in renminbi.
The report’s title says full-year targets remain unchanged. Morgan Stanley maintained its Overweight rating and price target of 210 yuan; the company announced a third interim dividend of 1.575 billion yuan, corresponding to a stable payout ratio of 65%.

Overseas revenue rose 11% year over year in the first nine months of 2026, or 16% in US dollar terms; this implies growth of approximately 7% year over year in the third quarter. Europe, Latin America and Asia-Pacific grew 20%, 18% and 14%, respectively.
China sales fell 1.3% year over year in the first nine months, implying a third-quarter decline of 1% year over year and an increase of 2% quarter over quarter. Morgan Stanley attributed the weakness to continued pressure on the equipment business; equipment currently accounts for 23% of China sales.
Domestic new businesses grew 20% in the first nine months, continuing their first-half momentum, and accounted for 23% of China revenue; including in vitro diagnostics, the share was 74%.

In vitro diagnostics revenue was 3.7 billion yuan in the third quarter, up 3% year over year; overseas in vitro diagnostics revenue rose 20% in the first nine months, including 30% growth in chemiluminescence. Combined market share in China’s biochemistry, chemiluminescence and coagulation segments rose from 12% at the end of 2025 to 15% in the third quarter of 2026.
As of the end of the third quarter, the company had secured 400 orders for in vitro diagnostics laboratory automation lines in China and 35 overseas; Morgan Stanley believes this will help drive subsequent reagent growth.
The two major equipment businesses recorded significant declines: third-quarter revenue in patient monitoring and life support was 2.5 billion yuan, down 13% year over year; medical imaging revenue was 1.5 billion yuan, down 14%. China sales in the former remained under pressure, while the latter’s overseas ultrasound business maintained high-single-digit growth.
Third-quarter revenue from new businesses was 1.6 billion yuan, up 27% year over year; revenue for the first nine months was 4.7 billion yuan, up 20.5%. This supported overall growth, but the decline in the equipment businesses remained a constraint.