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Hongcheng Environmental Technology Co (HKSE:02265) Degree of Operating Leverage : 1.49 (As of Dec. 2024)


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What is Hongcheng Environmental Technology Co Degree of Operating Leverage?

Degree of Operating Leverage (DOL) measures the percentage change in EBIT for a unit change in Revenue. Hongcheng Environmental Technology Co's Degree of Operating Leverage for the quarter that ended in Dec. 2024 was 1.49. The higher Degree of Operating Leverage, the higher operating risk the company will take.

The industry rank for Hongcheng Environmental Technology Co's Degree of Operating Leverage or its related term are showing as below:

HKSE:02265's Degree of Operating Leverage is ranked worse than
62.87% of 237 companies
in the Waste Management industry
Industry Median: 0.51 vs HKSE:02265: 1.49

Hongcheng Environmental Technology Co Degree of Operating Leverage Historical Data

The historical data trend for Hongcheng Environmental Technology 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.

* Premium members only.

Hongcheng Environmental Technology Co Degree of Operating Leverage Chart

Hongcheng Environmental Technology Co Annual Data
Trend Dec18 Dec19 Dec20 Dec21 Dec22 Dec23 Dec24
Degree of Operating Leverage
Get a 7-Day Free Trial 0.92 0.82 0.87 1.42 1.49

Hongcheng Environmental Technology Co Semi-Annual Data
Dec18 Dec19 Dec20 Jun21 Dec21 Jun22 Dec22 Jun23 Dec23 Jun24 Dec24
Degree of Operating Leverage Get a 7-Day Free Trial Premium Member Only Premium Member Only Premium Member Only 0.87 1.25 1.42 -23.43 1.49

Competitive Comparison of Hongcheng Environmental Technology Co's Degree of Operating Leverage

For the Waste Management subindustry, Hongcheng Environmental Technology 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.


Hongcheng Environmental Technology Co's Degree of Operating Leverage Distribution in the Waste Management Industry

For the Waste Management industry and Industrials sector, Hongcheng Environmental Technology Co's Degree of Operating Leverage distribution charts can be found below:

* The bar in red indicates where Hongcheng Environmental Technology Co's Degree of Operating Leverage falls into.


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Hongcheng Environmental Technology Co Degree of Operating Leverage Calculation

Hongcheng Environmental Technology Co's Degree of Operating Leverage for the quarter that ended in Dec. 2024 is calculated as:

Degree of Operating Leverage=% Change in EBIT**/% Change in Revenue
=( 84.225 (Dec. 2024) / 31.607 (Dec. 2023) - 1 )/( 249.737 (Dec. 2024) / 118.115 (Dec. 2023) - 1 )
=1.6648/1.1144
=1.49***

* 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.


Hongcheng Environmental Technology Co  (HKSE:02265) 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.


Hongcheng Environmental Technology Co Degree of Operating Leverage Related Terms

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Hongcheng Environmental Technology Co Business Description

Traded in Other Exchanges
N/A
Address
Yeyan Road North, Dadongzhuang Village North, Shahe Town, Shandong Province, Yantai, Laizhou, CHN
Hongcheng Environmental Technology Co Ltd is an investment holding company. It is engaged in (i) the provision of gold mine hazardous waste treatment services and sales of pyrite concentrate, and (ii) the production and sales of sulphuric acid, iron powder, electricity by reprocessing pyrite concentrate from the waste treatment services in the PRC. It has two reportable segments: Hazardous waste treatment and recycling and Reprocessing of pyrite concentrate and others. Key revenue is generated from Hazardous waste treatment and recycling segment.
Executives
Liu Ze Ming 2201 Interest of corporation controlled by you
Li Li Yan 2202 Interest of your spouse
Zeming International Investment Co., Ltd. 2101 Beneficial owner

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