Honghua Group Ltd gross margin has been in long-term decline. The average rate of decline per year is -22.4%.
The historical rank and industry rank for Honghua Group's Gross Margin % or its related term are showing as below:
HKSE:00196'
s Gross Margin % Range Over the Past 10 Years
Min: 9.9 Med: 21.65 Max: 30.02
Current: 9.9
During the past 13 years, the highestGross Margin % of Honghua Group was 30.02%. The lowest was 9.90%. And the median was 21.65%.
HKSE:00196's Gross Margin % is ranked worse than 78.15% of 929
companies
in the Oil & Gas industry
Industry Median: 27.87
vs HKSE:00196: 9.90
Honghua Group had a gross margin of 13.08% for the quarter that ended in Dec. 2023 => No sustainable competitive advantage
The 5-Year average Growth Rate of Gross Margin for Honghua Group was -22.40% per year.
Honghua Group Gross Margin % Historical Data
The historical data trend for Honghua Group's Gross Margin % can be seen below:
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
Competitive Comparison of Honghua Group's Gross Margin %
For the Oil & Gas Equipment & Services subindustry, Honghua Group's Gross Margin %, along with its competitors' market caps and Gross Margin % data, can be viewed below:
* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap. Note that "N/A" values will not show up in the chart.
Honghua Group's Gross Margin % Distribution in the Oil & Gas Industry
For the Oil & Gas industry and Energy sector, Honghua Group's Gross Margin % distribution charts can be found below:
* The bar in red indicates where Honghua Group's Gross Margin % falls into.
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
A positive Gross Profit is only the first step for a company to make a net profit. The gross profit needs to be big enough to also cover related labor, equipment, rental, marketing/advertising, research and development and a lot of other costs in selling the products.
Honghua Group (HKSE:00196) Gross Margin % Explanation
Warren Buffett believes that firms with excellent long term economics tend to have consistently higher margins.
Durable competitive advantage creates a high Gross Margin % because of the freedom to price in excess of cost. Companies can be categorized by their Gross Margin %
1. Greater than 40% = Durable competitive advantage
2. Less than 40% = Competition eroding margins
3. Less than 20% = no sustainable competitive advantage
Consistency of Gross Margin is key
Honghua Group had a gross margin of 13.08% for the quarter that ended in Dec. 2023 => No sustainable competitive advantage
Be Aware
If a company loses its competitive advantages, usually its gross margin declines well before its sales declines. Watching Gross Margin % and Operating Margin % closely helps avoid value trap situations.
Honghua Group Gross Margin % Related Terms
Thank you for viewing the detailed overview of Honghua Group's Gross Margin % provided by GuruFocus.com. Please click on the following links to see related term pages.
Honghua Group Ltd is engaged in manufacturing drilling rigs, oil and gas exploitation equipment, providing drilling services and fracturing. It manufactures conventional land drilling rigs, digital drilling rigs, accessories for drilling rigs, as well as the parts and components for the drilling rigs or the maintenance of the drilling rigs in operation. Its segments include Land drilling rigs; Parts and components and others; Drilling engineering services; and Fracturing. It derives a majority of revenue from Parts and components and others segment. Geographically it operates in the PRC, Americas, Middle East, Europe and Central Asia, South Asia and South East, and Africa, of which prime revenue is derived from the PRC.
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