Mindray reported 1H26 revenue of RMB17.75bn (+6.0% YoY) with 2Q26 growth accelerating to 10.5% YoY, broadly in line with our expectations. Attributable net profit decreased 3.6% YoY to RMB5.05bn, mainly due to FX losses. Excluding FX impact, net profit grew 8.7% YoY in 1H26. We leave our 2026E-28E revenue forecasts largely unchanged, which continue to assume a recovery in the domestic business and sustained solid growth overseas. We lower our 2026E earnings forecast to reflect near-term FX headwinds, while keeping our 2027E- 28E earnings estimates broadly unchanged.

Overseas businesses remained strong led by Europe and emerging markets. Overseas revenue reached RMB9.5bn (+13.7% YoY; +18.4% in USD terms), accounting for 53% of the total in 1H26. Europe remained the standout, with revenue up nearly 25% YoY. Key markets including the UK, France and Italy each delivered growth of over 30% YoY. Latin America grew nearly 20% YoY, while APAC rose 17% YoY in 1H26, supported by strong performance in India, Mexico and Brazil. Notably, growth was broadbased across product lines. Overseas IVD revenue increased 21% YoY, with immunoassay up 30% YoY. Overseas PMLS grew over 10% YoY, and overseas ultrasound delivered high-single-digit growth. We expect Europe, Latin America and APAC to drive continued double-digit overseas growth in 2026E.

Domestic recovery appears to be underway. Domestic revenue was RMB8.3bn (-1.6% YoY), but we estimate 2Q26 already returned to positive growth (+~8.8% YoY). Emerging businesses and IVD are increasingly the main growth engines domestically. In 1H26, domestic emerging businesses rose 21% YoY and accounted for 24% of domestic revenue; together with IVD, they represent 74% of total domestic revenue. Mindray continued to gain market share in core IVD categories (CLIA, chemistry, coagulation), with share rising from 10% in 1H25 to 14% in 1H26. Its TLA installed base also expanded rapidly. In 1H26, Mindray secured over 260 new TLA orders and completed nearly 200 installations, driving an upward revision to its fullyear TLA order intake target. Therefore, we continue to expect domestic revenue to resume single-digit growth in 2026E, supported by IVD share gains, continued growth in emerging businesses, and an easier comparison base.

Maintain BUY. We maintain our FY26E-28E revenue forecasts largely unchanged and derive our target price of RMB204.94 based on a 9-year DCF model (WACC: 9.1%, terminal growth: 3.0%; both unchanged). Risks: centralized procurement-driven price cuts; domestic procurement demand weakness; overseas expansion underperformance.