A New Billionaire and an Eightfold Increase in Value: the Magic of Listing in China

(Bloomberg) -- When Li Xiting secured his company’s first contract at a medical-equipment convention in the 1990s, he was trembling with such excitement that he had to sign three times.

Today, Shenzhen Mindray Bio-Medical Electronics is China’s largest medical-equipment manufacturer, a $25 billion behemoth that has made Li, the chairman, Singapore’s third-richest person with a $7.2 billion fortune, and given fellow co-founder Xu Hang a $6.7 billion nest egg. Thanks to the firm’s decision to relist in China, its market value has swelled almost eightfold, creating yet another billionaire: company President Cheng Minghe. The three have a combined net worth of $15.3 billion, according to the Bloomberg Billionaires Index.

Shares of the company had traded in New York until 2016, when a consortium led by Li, Xu and Cheng took it private at a market value of $3.3 billion, regulatory filings show. In October, the firm relisted on the Shenzhen stock exchange’s ChiNext board through an initial public offering that valued Mindray at $8.6 billion. The stock has surged 189 percent since.

Mindray, which makes patient-monitoring and life-support systems as well as ultrasound machines, posted revenue of 13.6 billion yuan ($2.1 billion) in 2018, a 23 percent increase from a year earlier. Net income climbed 42 percent to 3.7 billion yuan.

What Bloomberg Intelligence Says

“Mindray’s large market cap should attract more investors and financing, while its well-diversified revenue sources could support more stable growth.”
--Nikkie Lu, analyst
Click here to view the research.

Bloomberg Intelligence analyst Nikkie Lu predicts the medical-equipment maker will gain market share in China from overseas competitors including General Electric Co. and Roche Holding AG as the country’s policies favor a shift away from imports.

Mindray is among several Chinese companies that delisted in the U.S. to seek higher valuations at home. The market value of billionaire Jason Jiang’s Focus Media Information Technology Co. more than tripled since 2013, when it went private in a $3.8 billion buyout. Zhou Hongyi, chairman of 360 Security Technology Inc., added $12 billion to his fortune at the time the software provider began trading in China through a backdoor listing.

--With assistance from Ben Stupples.

To contact the reporter on this story: Venus Feng in Hong Kong at vfeng7@bloomberg.net

To contact the editors responsible for this story: Pierre Paulden at ppaulden@bloomberg.net, Peter Eichenbaum, Steven Crabill

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