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Yau Lee HoldingsHKSE:00406 42 Gross Margin % is 1.90% as of Mar. 2026, which is 76% below its 10-year median of 7.88. GuruFocus rates HKSE:00406 with a GF Score™ of 42/100 and a GF Value™ of HK$1.45 (Possible Value Trap). The stock has 5 warning signs investors should review. Among 1,729 Construction companies, Yau Lee Holdings ranks worse than 92.83% on this metric.
Yau Lee Holdings (HKSE:00406) 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
Yau Lee Holdings had a gross margin of 1.90% for the quarter that ended in Mar. 2026 => 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.
Yau Lee Holdings Gross Margin % Related Terms
Yau Lee Holdings Gross Margin % Historical Data
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The historical data trend for Yau Lee Holdings'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.
HKSE:00406 vs PWR, FIX, EME: Gross Margin % Comparison
For the Engineering & Construction subindustry, Yau Lee Holdings'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.
Yau Lee Holdings Gross Margin % vs Construction Industry
For the Construction industry and Industrials sector, Yau Lee Holdings's Gross Margin % distribution charts can be found below:
* The bar in red indicates where Yau Lee Holdings'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.
Yau Lee Holdings (HKSE:00406) has a Gross Margin % of 1.90% as of Mar. 2026. Gross margin is the ratio of total gross profit to net sales. View historical data on Yau Lee Holdings and its competitors. This is 76% below median its historical median of 7.88. Over the past decade, Yau Lee Holdings' Gross Margin % has ranged from 1.40 to 9.79. According to the industry distribution chart, Yau Lee Holdings ranks #1605 out of 1729 companies in the Construction industry, placing it in the top 92.8%.
Is Yau Lee Holdings' Gross Margin % too high?
Yau Lee Holdings' current Gross Margin % of 1.90% is 76% below median its 10-year median of 7.88. Over the past 10 years, this metric has ranged from a low of 1.40 to a high of 9.79. The Construction industry median Gross Margin % is 20.77. Yau Lee Holdings' value of 1.90% is 90.9% below this industry median. Based on the distribution chart, Yau Lee Holdings ranks #1605 out of 1729 companies in the Construction industry, which is in the bottom quartile relative to peers. Overall, Yau Lee Holdings has a GF Score™ of 42/100 and is considered Possible Value Trap, reflecting its overall financial health beyond just this single metric.
How does Yau Lee Holdings' Gross Margin % compare to PWR and FIX?
According to the Construction industry distribution chart, Yau Lee Holdings ranks #1605 out of 1729 companies for Gross Margin %. This places Yau Lee Holdings in the lower half of its industry. The industry median Gross Margin % is 20.77. Yau Lee Holdings' value of 1.90% is 90.9% below this benchmark. Historically, Yau Lee Holdings' own Gross Margin % has ranged from 1.40 to 9.79 over the past decade. While the company's 10-year median is 7.88 vs. the industry median of 20.77, Yau Lee Holdings has consistently been below the industry average. See the competitive comparison table and distribution chart on this page for a detailed peer-by-peer breakdown.
What is a good Gross Margin % for a Construction company?
The median Gross Margin % among Construction companies is 20.77, based on 1,729 companies in the industry. Companies in the top quartile (top 25%) have a Gross Margin % significantly above this median, while those in the bottom quartile fall well below. However, Gross Margin % should not be evaluated in isolation — investors should consider it alongside profitability, growth, and financial strength metrics. Yau Lee Holdings's current Gross Margin % of 1.90% is 90.9% 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 Gross Margin % mean?
A high Gross Margin % can signal that a stock is expensive relative to its fundamentals. Gross margin is the ratio of total gross profit to net sales. View historical data on Yau Lee Holdings and its competitors. For the Construction industry, the median Gross Margin % is 20.77 — values significantly above this may indicate overvaluation, while values below may suggest a bargain or underlying issues. Yau Lee Holdings's current Gross Margin % is 1.90%, which is 76% below median its own 10-year median of 7.88. However, context matters — high-growth companies often justify higher valuations. Always evaluate alongside other metrics like GF Score™ and GF Value™.
Is Yau Lee Holdings stock overvalued right now?
Based on GuruFocus' analysis, Yau Lee Holdings (HKSE:00406) is currently considered Possible Value Trap. The stock's GF Value™ is HK$1.45, compared to a current price of HK$0.51 — trading 65.2% below its estimated fair value. The current Gross Margin % is 1.90%, which is 76% below median its 10-year median of 7.88 and 90.9% below the Construction industry median of 20.77. Yau Lee Holdings' overall GF Score™ is 42/100 with 5 warning signs to review. Investors should evaluate multiple metrics — including profitability, growth, and financial strength — before making a decision.
How is Gross Margin % calculated?
Gross Margin % is calculated from a company's financial statements. For Yau Lee Holdings (HKSE:00406), the current Gross Margin % is 1.90% as of Mar. 2026. 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 Yau Lee Holdings (HKSE:00406) Overvalued in 2026?
Based on GuruFocus' analysis, Yau Lee Holdings stock appears to be undervalued.
The current stock price of HK$0.51 is trading 65.2% below its estimated GF Value™ of HK$1.45.
GuruFocus considers Yau Lee Holdings to be Possible Value Trap.
Key valuation signals for HKSE:00406:
Gross Margin %: 1.90% (76% below median its 10-year median of 7.88)
GF Value™: HK$1.45 vs. price of HK$0.51 (65.2% below fair value)
Industry Position: 90.9% below the Construction median (#1605 of 1729)
No single metric tells the full story. See the HKSE:00406 stock analysis page for a complete view including 30-year financials, guru trades, and insider activity.
Yau Lee Holdings Ltd is an investment holding company. The company's operating segments include Construction, Electrical and mechanical installation, Building materials supply, Property investment and development, Hotel Operations, and Others. The company generates maximum revenue from the Construction segment which includes contracting of building construction, plumbing, renovation, maintenance, and fitting-out projects. Geographically, the company derives a majority of its revenue from Hong Kong.
42GF Score
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