China's Dehaier Medical Systems' Q3 stagnates as seeds planted for expansion

Dehaier Medical Systems ($DHRM) made an ambitious decision to expand into healthcare-related government procurement projects and homecare oxygen therapy services while keeping its medical device business growing. That hasn't been fully realized yet, so the company took a small hit in its 2012 third quarter as it shifted gears and invested in its planned expansion.

Revenue for the Chinese medical device and equipment maker reached $5.53 million, a 2.8% decline from the $5.69 million booked over the same period last year. Net income also dipped down to $1.04 million, versus $1.38 million in the 2011 third quarter. Dehaier blamed higher administrative and financial expenses, in part, for the decline and the increase in the cost of revenue.

The company is relatively small for now but has made a concerted effect to expand within China as the government modernizes its healthcare services in less populated parts of the country. Dehaier, for example, signed a number of government, hospital and corporate contracts during its third quarter to provide medical equipment to various healthcare facilities.

But Dehaier is also eying international growth. In May, Dehaier launched a wholly owned U.S. subsidiary based in Illinois with a focus on sales but also evaluating potential M&A targets.

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