Cochlear already holds 85 per cent of the market in China, compared with its 70 per cent market share in the US and Europe.

The company's dominance in the world's most populous nation is the result of years of investment.

"Cochlear basically brought audiology to China," Dr Roberts said last week.

The company had to train people to diagnose hearing disorders. It also set up the facilities for the freshly trained audiologists.

And its dominance has rival companies reeling.

"The competition don't have a game plan," Dr Robert said.

China's one-child policy also benefited Cochlear, he said, because parents "mortgaged the house" to help their only offspring.

"It makes sense to get it addressed – if you can afford it."

Unlike Australia, South Korea and many other countries, China does not reimburse implant recipients.

But Cochlear's growth in the world's most populous nation is limited as it waits for regulatory approval to sell its new Nucleus Freedom device.

Goldman Sachs JBWere (GSJBW) has told its clients to expect approval within 18 months.

Already one of the hottest stocks on the market, Cochlear delivered a gangbuster half-year result last week that sent its share price soaring. It also sent some analysts scurrying back to their spreadsheets.

"Cochlear has maintained full-year 2006 guidance – about $80 million, up 37 per cent on the previous year – but there is no coincidence that the words 'at least' have replaced previous wording," Citigroup told its clients.

It has set a new share-price target of $51.97, up from $50.02, and raised profit forecasts.

Citigroup was among the most bullish of the pundits, saying – in italics – "earnings will need to deteriorate to meet guidance!" GSJBW raised its earnings forecasts too, saying the company's target was "conservative".

GSJBW lifted its share-price valuation from $45.92 to $49.40.

Cochlear shares closed at $47.70 on Friday.

Citigroup said bilateral implants would become standard for profoundly deaf infants: "The move underwrites our growth outlook."

Still, UBS cut its earnings expectations and maintained its price target at $44.60, expressing concern about the potential for rivals' products to take market share and ultimately reduce Cochlear's margins.

By The Daily Telegraph
http://dailytelegraph.news.com.au/story/0,20281,18201654-5001024,00.html