Deutsche Bank Reports on Mindray Medical, China Medical Technologies (MR, CMED)

In a report released today, Deutsche Bank commented on Mindray Medical MR and China Medical Technologies CMED. In the report, Deutsche Bank was positive in its outlook for the companies in terms of their potential growth in the Chinese economy. Deutsche Bank writes, “[Chinese] Government spending is off to a better start than it was in the same period last year. Government spending on healthcare was RMB46.4bn in April 2011, representing 44% YoY growth. Year-to-date government spending is up 51% YoY, which is ahead of last year's pace of 15%. We believe government spending will likely have a positive correlation with device sector growth, despite the fact that it is difficult to quantify. Our due diligence suggestions that Solutions for a Basic Healthcare Facilities, a program for supplying equipment to a county-level hospitals funded by the government, has morphed into a new focus for both domestic device manufacturers and MNCs in 2011.” Deutsche Bank presently has a Buy rating on both Mindray Medical and China Medical Technologies. Mindray Medical closed the trading day on Friday at $30.44, up from $29.96 at the open. Shares of China Medical Technologies closed the trading day at $11.57, down from the opening price of $11.70.