- The Washington Times - Tuesday, August 14, 2007

Chindex International Inc. announced a contract last week to sell a da Vinci Surgical System to Queen Mary Hospital in Hong Kong in its role as the exclusive supplier for the manufacturer in China.

The system’s use of robotic arms during surgery yields greater precision than can be expected of human doctors.

The deal is another example of how Chindex International has tied its future to the growing economy and health care needs of China, which this summer surpassed the United States for the first time as the world’s biggest economic power.

Bethesda-based Chindex International supplies medical services and equipment from the United States and Europe to China and Hong Kong, Macao and Taiwan.

The equipment for Queen Mary Hospital was the third da Vinci Surgical System the company has sold in Hong Kong.

Terms of the deal were not announced, but financial analysts estimate the systems sell for more than $1 million apiece.

“We have seen the interest in robot-assisted, minimally-invasive surgery grow dramatically in Hong Kong and mainland China,” said Roberta Lipson, Chindex International’s chief executive officer.

The company reported net income of $809,000, or 11 cents per share, in the second quarter of this year, comparing favorably with $512,00, or 7 cents per share, in the same quarter a year earlier. It earned $26.8 million in revenue in the second quarter of 2007 compared with $24.4 million one year earlier.

Its stock, CHDX on the Nasdaq Stock Market, closed yesterday at $18.80 a share, down 75 cents, or 3.84 percent, from Friday’s closing price.

The medical-service division of Chindex International appears to be growing the fastest, according to financial analysts.

“I believe the health care services is the key for the company,” said Julie Chen, research analyst for the financial firm Brean Murray, Carret & Co.

Chindex International owns two hospitals in China, one in Beijing and another in Shanghai. It’s also expanding a network of medical clinics throughout the country.

Health care services in China are expanding along with the economy, Miss Chen said.

“As they grow richer, people are far more aware of the quality of health, and with that they demand better health care services,” she said.

The company’s health care services, called United Family Healthcare, provide emergency rooms, surgery, laboratory work, blood banking and other services.

Its medical-products division markets and sells ultrasound-imaging devices, chemistry analyzers, biopsy equipment, bone densitometers, robotic surgical machinery and other supplies.

The flat performance of its stock in recent months should not deter investors, Miss Chen said.

“We remain positive on [Chindex International] and view any weaknesses on the stock as a buying opportunity,” she said.

Risks that she said threaten the company’s growth include political conditions and China’s dependence on foreign trade, new medical technology that could disrupt Chindex International’s product line and dependence on dealers to sell the equipment.

The company was founded in 1981 and operates with about 1,000 employees.



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