As a medical device maker with a market cap of just more than $900 million, China Medical Technologies
The company reported another huge quarter: Earnings growth was up 43% per adjusted American depositary share for Q1 on a 67% rise in net revenue. The company attributed the growth to the momentum from its in-vitro diagnostic business, which exceeded the revenue generated from its ultrasound tumor therapy system for the first time.
Each of China Medical's three main lines of business produced tremendous sales growth in the first quarter. The ECLIA diagnostics line churned out an 85% increase in sales because hospitals have increasingly warmed up to the use of ECLIA analyzers in China, and its reagent kits are still in high demand. Its ultrasound tumor therapy system sales increased by 21%, and the newly launched FISH diagnostic systems business chipped in 10% of the total revenue for the quarter.
The impressive results were not enough to please Wall Street, though, as the stock opened down 5.5% on Tuesday. Given the market's recent volatility and the fact that investors have become more defensive in terms of taking on risk, it's not surprising that a small-cap, emerging-markets, medical-device stock like China Medical would be hurt.
The stock still is up 24% year to date, outperforming some of the larger medical device stocks here in the States, such as Baxter
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