Medical-Device Maker Looks for New Life With $1 Billion IPO

Shenzhen Mindray Bio-Medical Electronics Co. Ltd. has filed to raise more than 6 billion yuan ($935 million) through a listing on China’s Nasdaq-style ChiNext board, becoming the latest Chinese firm to abandon a New York listing to seek a higher valuation by relisting at home.

The filing comes after the medical-device maker abandoned an earlier plan to list in Shenzhen, one of China’s two main boards. It took that action in February after disclosing an intangible-assets ratio that was higher than levels permitted by the regulator due to a change in accounting rules. Since then, the regulator has lowered that ratio to just under the maximum allowable level of 20%.

According to its latest prospectus released on Tuesday, Mindray’s profit rose 58% to 2.6 billion yuan last year, while its revenue grew about 20% over the same period to 11.2 billion yuan.

The company is getting an increasing amount of its sales from its home China market as Beijing rolls out a new national system to replace the old one of cradle-to-grave health care provided by former state-owned work units, which were China’s main employers during the socialist era. The company got about 46% of its sales from overseas last year, a ratio that has dropped steadily over the last two years.

The company pointed out that China’s medical-device market has especially strong potential for growth. It said the ratio of drug-to-medical device sales in China is now about 3-to-1, which is far higher than the 1-to-1 ratio seen in the United States.

Founded in 1991 in the southern boomtown of Shenzhen on the Hong Kong border, Mindray was one of China’s earlier companies to list in New York when it made an IPO there in 2006. But like many of its peers, the company felt its shares were undervalued by U.S. investors and privatized in 2016 in a deal that valued the company at $3.3 billion. A funding round shortly after that delisting valued the company sharply higher at about 54 billion yuan, or $8.5 billion, according to a private equity source.

Contact reporter Yang Ge (geyang@caixin.com)