NEW YORK (TheStreet) -- Shares of Mindray Medical (MR) - Get Montage Resources Corp. Report were gaining 7.4% to $29.50 on heavy trading volume Thursday after the Chinese medical instruments company announced it received a "going private" proposal.

Mindray said that Executive Chairman, President and co-CEO Li Xiting, Co-CEO and Chief Strategic Officer Cheng Minghe, and Chairman Xu Hang sent a preliminary non-binding proposal letter to the board of directors offering to acquire all outstanding shares they don't already own for $30 a share.

The company plans to form a special committee of independent directors to consider the proposal to being the company private, and warned shareholders it hasn't made any decisions on the matter. The company said there is no assurance that an offer will be made, that any agreement can be reached, or that any transaction will be approved.

About 1.6 million shares of Mindray were traded by 11 a.m. Thursday, above the company's average trading volume of about 690,000 shares a day.

TheStreet Recommends

TheStreet Ratings team rates MINDRAY MEDICAL INTL as a Hold with a ratings score of C+. TheStreet Ratings Team has this to say about their recommendation:

"We rate MINDRAY MEDICAL INTL (MR) a HOLD. The primary factors that have impacted our rating are mixed -- some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures and reasonable valuation levels. However, as a counter to these strengths, we also find weaknesses including deteriorating net income, disappointing return on equity and feeble growth in the company's earnings per share."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • MR's revenue growth trails the industry average of 22.6%. Since the same quarter one year prior, revenues slightly increased by 2.9%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
  • MR's debt-to-equity ratio is very low at 0.20 and is currently below that of the industry average, implying that there has been very successful management of debt levels. To add to this, MR has a quick ratio of 2.40, which demonstrates the ability of the company to cover short-term liquidity needs.
  • The gross profit margin for MINDRAY MEDICAL INTL is rather high; currently it is at 59.67%. Regardless of MR's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, MR's net profit margin of 11.80% compares favorably to the industry average.
  • The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed compared to the Health Care Equipment & Supplies industry average, but is greater than that of the S&P 500. The net income has decreased by 9.7% when compared to the same quarter one year ago, dropping from $35.64 million to $32.17 million.
  • The company's current return on equity has slightly decreased from the same quarter one year prior. This implies a minor weakness in the organization. When compared to other companies in the Health Care Equipment & Supplies industry and the overall market, MINDRAY MEDICAL INTL's return on equity is below that of both the industry average and the S&P 500.
  • You can view the full analysis from the report here: MR Ratings Report