1Q26 in line; overseas and emerging businesses driving growth

PLEASE READ THE ANALYST CERTIFICATION AND IMPORTANT DISCLOSURES ON LAST PAGE MORE REPORTS FROM BLOOMBERG: RESP CMBR <GO> OR http://www.cmbi.com.hk 1 MN 30 Apr 2026 CMB International Global Markets | Equity Research | Company Update Mindray (300760 CH) Mindray (300760 CH) - 1Q26 in line; overseas and emerging businesses driving growth 1Q26 in line; overseas and emerging businesses driving growth Mindray reported 1Q26 revenue of RMB8.35bn (+1.4% YoY) and attributable net profit of RMB2.3bn (-11.3% YoY), largely in line with our expectations. Overseas business remains the major growth driver with robust momentum in Europe and developing markets. Domestic business still faced near-term headwinds from channel destocking in 1Q26. We maintain our FY26E revenue forecast, expecting a return to positive domestic growth in 2026E.  Rapid overseas growth led by Europe and emerging markets. Overseas revenue increased 15.7% YoY to RMB4.45bn, representing 53% of total revenue in 1Q26. Revenue from Europe grew more than 25% YoY, with key markets including the UK, France, Germany, and Italy delivering rapid growth as penetration into high-end accounts accelerated. Emerging markets also recovered, up 15% YoY, with India and Mexico each growing more than 30%. By segment, overseas IVD (>20% YoY), PMLS (15% YoY), and medical imaging (>10% YoY) all reported strong growth. We expect deepening localization and continued progress in high-end accounts to drive overseas growth in 2026E.  Domestic business remained under pressure but is expected to recover in 2026E. Domestic revenue declined 11.1% YoY to RMB3.9bn in 1Q26, primarily due to channel destocking in PMLS and MIS. However, domestic CLIA revenue increased by ~10% YoY in 1Q26 despite VBP-related price pressure, driven by further penetration into large hospital accounts. Consequently, Mindray’s share in core IVD categories (CLIA, chemistry, coagulation) rose from 10% in 1H25 to 13% in 1Q26, according to Mindray’s 1Q26 report. The MT8000 TLA system completed over 80 installations in 1Q26, which should support reagent pull-through going forward. Moreover, domestic emerging businesses increased over 18% YoY and accounted for 23% of domestic revenue. While destocking in equipment businesses (PMLS+MIS) may still weigh on near-term growth, these segments accounted for less than 30% of domestic revenue. Therefore, we expect domestic revenue to return to positive growth in 2026E, supported by IVD share gains, continued growth in emerging businesses, and an easier comparison base.  Emerging businesses grew rapidly. Revenue from emerging businesses reached RMB1.4bn in 1Q26, up 18.2% YoY. Notably, IVD and emerging businesses together accounted for nearly 40% of overseas revenue and more than 70% of domestic revenue, highlighting steady progress in Mindray’s shift toward recurring, consumables-based revenue mix.  Maintain BUY. We maintain our FY26-28E earnings forecasts and derive our target price of RMB204.54 bas