Degree of Operating Leverage (DOL) measures the percentage change in EBIT for a unit change in Revenue.
Hong Kong and China Gas Co's Degree of Operating Leverage for the quarter that ended in Dec. 2025 was 0.76. The higher Degree of Operating Leverage, the higher operating risk the company will take.
The industry rank for Hong Kong and China Gas Co's Degree of Operating Leverage or its related term are showing as below:
HKSE:00003's Degree of Operating Leverage is ranked better than 53.24% of 494
companies
in the Utilities - Regulated industry
Industry Median: 0.985
vs HKSE:00003: 0.76
Hong Kong and China Gas Co (HKSE:00003) Degree of Operating Leverage Explanation
Degree of Operating Leverage (DOL) is a leverage ratio that measures the sensitivity of a company’s operting income, also referred to as Earnings Before Interest and Taxes (EBIT), to fluctuations in its Revenue. DOL is a method used to quantify a company’s operating risk. This risk is related to the company's structure of variable costs and fixed costs. Since the fixed costs do not allow the company to adjust the operating costs, the operating risk rises with a higher fixed-to-variable costs proportion.
A high Degree of Operating Leverage indicates that the company’s fixed costs exceed its variable costs. By increasing the sales, the company can earn more profits. In addition, the company must be able to maintain relatively high sales to cover all fixed costs.
Be Aware
The use of operating leverage varies across different industries and business sectors, and the application of Degree of Operating Leverage (DOL) should be adjusted accordingly.
Hong Kong and China Gas Co Degree of Operating Leverage Related Terms
Hong Kong and China Gas Co Degree of Operating Leverage Historical Data
* Premium members only.
The historical data trend for Hong Kong and China Gas Co's Degree of Operating Leverage 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.
Hong Kong and China Gas Co Degree of Operating Leverage Chart
HKSE:00003 vs ATO, NI: Degree of Operating Leverage Comparison
For the Utilities - Regulated Gas subindustry, Hong Kong and China Gas Co's Degree of Operating Leverage, along with its competitors' market caps and Degree of Operating Leverage 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.
Hong Kong and China Gas Co Degree of Operating Leverage vs Utilities - Regulated Industry
For the Utilities - Regulated industry and Utilities sector, Hong Kong and China Gas Co's Degree of Operating Leverage distribution charts can be found below:
* The bar in red indicates where Hong Kong and China Gas Co's Degree of Operating Leverage 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.
** TTM data of EBIT and Revenue was used to calculate Degree of Operating Leverage.
*** Please be aware that the Degree of Operating Leverage calculations are based on company-level data using the primary share class. The calculated data provided is for demonstration purposes and may slightly differ from the results displayed in the title due to potential variations caused by currency exchange rate differences throughout the year.
What does a Degree of Operating Leverage of 0.76 mean?
Hong Kong and China Gas Co (HKSE:00003) has a Degree of Operating Leverage of 0.76 as of Dec. 2025. Degree of Operating Leverage (DOL) measures the percentage change in EBIT for a unit change in Revenue. View historical data for Hong Kong and China Gas Co and its competitors. According to the industry distribution chart, Hong Kong and China Gas Co ranks #231 out of 494 companies in the Utilities - Regulated industry, placing it in the top 46.8%.
Is Hong Kong and China Gas Co's Degree of Operating Leverage too high?
Hong Kong and China Gas Co's current Degree of Operating Leverage is 0.76. The Utilities - Regulated industry median Degree of Operating Leverage is 0.99. Hong Kong and China Gas Co's value of 0.76 is 22.8% below this industry median. Based on the distribution chart, Hong Kong and China Gas Co ranks #231 out of 494 companies in the Utilities - Regulated industry, which is above the industry midpoint. Overall, Hong Kong and China Gas Co has a GF Score™ of 83/100 and is considered Fairly Valued, reflecting its overall financial health beyond just this single metric.
How does Hong Kong and China Gas Co's Degree of Operating Leverage compare to ATO and NI?
According to the Utilities - Regulated industry distribution chart, Hong Kong and China Gas Co ranks #231 out of 494 companies for Degree of Operating Leverage. This puts Hong Kong and China Gas Co in the upper half of its industry. The industry median Degree of Operating Leverage is 0.99. Hong Kong and China Gas Co's value of 0.76 is 22.8% below this benchmark. See the competitive comparison table and distribution chart on this page for a detailed peer-by-peer breakdown.
What is a good Degree of Operating Leverage for an Utilities - Regulated company?
The median Degree of Operating Leverage among Utilities - Regulated companies is 0.99, based on 494 companies in the industry. Companies in the top quartile (top 25%) have a Degree of Operating Leverage significantly above this median, while those in the bottom quartile fall well below. However, Degree of Operating Leverage should not be evaluated in isolation — investors should consider it alongside profitability, growth, and financial strength metrics. Hong Kong and China Gas Co's current Degree of Operating Leverage of 0.76 is 22.8% below the industry median. Use the industry distribution chart on this page to see where any company falls relative to its peers.
What does a high Degree of Operating Leverage mean?
A high Degree of Operating Leverage can signal that a stock is expensive relative to its fundamentals. Degree of Operating Leverage (DOL) measures the percentage change in EBIT for a unit change in Revenue. View historical data for Hong Kong and China Gas Co and its competitors. For the Utilities - Regulated industry, the median Degree of Operating Leverage is 0.99 — values significantly above this may indicate overvaluation, while values below may suggest a bargain or underlying issues. Hong Kong and China Gas Co's current Degree of Operating Leverage is 0.76. However, context matters — high-growth companies often justify higher valuations. Always evaluate alongside other metrics like GF Score™ and GF Value™.
Is Hong Kong and China Gas Co stock overvalued right now?
Based on GuruFocus' analysis, Hong Kong and China Gas Co (HKSE:00003) is currently considered Fairly Valued. The stock's GF Value™ is HK$6.19, compared to a current price of HK$6.72 — trading 8.6% above its estimated fair value. The current Degree of Operating Leverage is 0.76 and 22.8% below the Utilities - Regulated industry median of 0.99. Hong Kong and China Gas Co's overall GF Score™ is 83/100 with 7 warning signs to review. Investors should evaluate multiple metrics — including profitability, growth, and financial strength — before making a decision.
How is Degree of Operating Leverage calculated?
Degree of Operating Leverage is calculated from a company's financial statements. For Hong Kong and China Gas Co (HKSE:00003), the current Degree of Operating Leverage is 0.76 as of Dec. 2025. GuruFocus calculates this using data sourced from SEC filings and annual reports. See the calculation section and 30-year financial data on this page for the full breakdown.
Is Hong Kong and China Gas Co (HKSE:00003) Overvalued in 2026?
Based on GuruFocus' analysis, Hong Kong and China Gas Co stock appears to be overvalued.
The current stock price of HK$6.72 is trading 8.6% above its estimated GF Value™ of HK$6.19.
GuruFocus considers Hong Kong and China Gas Co to be Fairly Valued.
Key valuation signals for HKSE:00003:
Degree of Operating Leverage: 0.76
GF Value™: HK$6.19 vs. price of HK$6.72 (8.6% above fair value)
Industry Position: 22.8% below the Utilities - Regulated median (#231 of 494)
No single metric tells the full story. See the HKSE:00003 stock analysis page for a complete view including 30-year financials, guru trades, and insider activity.
Hong Kong and China Gas Co Ltd, is the oldest public utility company in Hong Kong. The company's core business comprises the production and distribution of town gas in Hong Kong, with a monopoly on distribution and retail. The company is also investing in water, upstream gas, and new energies. The Group's principal activities are the production, distribution, and marketing of gas and related products or services, water supply and waste treatment, renewable energy businesses, extended businesses, and fuels businesses (Green Fuels) in Hong Kong and the Chinese mainland. The company operates in three segments: Gas, water and waste treatment, renewable energy, extended businesses, and related businesses, Green Fuels, and Property.
83GF Score
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Degree of Operating Leverage is just one metric. See GF Value™, 30-year financials, guru trades, warning signs, and more.
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