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Joining today’s call are Mr. Xu Hang, our Chairman and Co-CEO; Mr. Li Xiting, our President and Co-CEO; Mr. Jie Liu, our Chief Financial Officer and Chief Operating Officer; Mr. David Gibson, our President of North America Operations; Mr. Alex Lung and Ms. May Li, our Deputy Chief Financial Officers.Our management team will review second quarter highlights, as well as speak to the current financial and the market environments of each of our major sales markets, after which, management will be available to answer your questions. Before we continue, please note that this call will contain forward-looking statements made under the Safe Harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. Statements made and views expressed here today that are not historical facts or forward-looking statements. You should be cautioned that forward-looking statements are only predictions and may involve inherent risks and uncertainties. As such our actual results may be materially different from the statements made and views expressed here today due to a variety of factors. A number of such risks, uncertainties, and factors are outlined in our public filings with the SEC. In particular, please refer to risk factors beginning on page four of our Annual Report on Form 20-F. Any projections made here today are based only on limited information currently available to us, which is subject to change. Mindray does not undertake any obligations to update any forward-looking statements except as required under applicable laws. I will now turn the call over to Mindray’s Deputy CFO, Ms. May Li. May Li – Deputy Chief Financial Officer Thank you, Cathy. Good morning and good evening ladies and gentlemen. Thank you for joining us today for our 2011 second quarter earnings results conference call. First, I will provide an overview of the company’s overall financial results of the quarter. Mr. Jie Liu will then discuss our performance in all geographical regions outside of North America. Mr. David Gibson will then discuss our North America operations. Before opening the call to questions, Jie will discuss a couple of company updates as well as our 2011 outlook.
Continuing the sales momentum, we had another good quarter. In the second quarter, we achieved a 21.2% year-over-year increase on the top line for total of US$217.3 million. China revenues lead growth and grew 25.3% year-over-year. This was driven by our regular sales or non-tender sales, which represented almost all of China sales this quarter. The trend towards recovery continued resulting from the successful implementation of our sales re-enforcement program carried out during the last few quarters, as well as favorable government spending trend on country level hospitals.International revenues were strong at US$126.6 million with 18.5% year-over-year growth. This represents 58.2% of worldwide sales. Our good performance continues to reflect the success of our increased investments in the international delivery channel. In this quarter, emerging markets remained our key drivers of growth was more than 20% year-over-year growth despite the Middle East and African crisis. Developed markets also contributed nicely with double-digit sales growth. Our gross margin remains healthy. Non-GAAP gross margin was 57.6% as compared to 59% in the second quarter of 2010 and 55.9% in the first quarter of this year. This improvement from last quarter is a result of cost reduction and optimized product mix. Same as last quarter, gross margin lowered than last year due to this new city construction tax, the education surcharge and R&D appreciation. R&D continued to be our focus for the past quarter. We introduced one major new product this quarter, the BC 68,000, a high level auto hematology analyzer as well as several exclusive reagents. This is one of the most advanced IVD products Mindray offers and we are optimistic about its market potential as well as wage and sales we’ll potentially bring. Wage and sales continue to accelerate this quarter to 28.4% of our IVD sales. We expect wage and sales to become larger product of the IVD sales in the coming quarters. Read the rest of this transcript for free on seekingalpha.com