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China Financial Services Holdings (HKSE:00605) 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
China Financial Services Holdings had a gross margin of 94.01% for the quarter that ended in Dec. 2025 => Durable 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.
China Financial Services Holdings Gross Margin % Related Terms
China Financial Services Holdings Gross Margin % Historical Data
* 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.
China Financial Services Holdings Gross Margin % Chart
HKSE:00605 vs V, MA, AXP: Gross Margin % Comparison
For the Credit Services subindustry, China Financial Services 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.
China Financial Services Holdings Gross Margin % vs Credit Services Industry
For the Credit Services industry and Financial Services sector, China Financial Services Holdings's Gross Margin % distribution charts can be found below:
* The bar in red indicates where China Financial Services 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.
China Financial Services Holdings (HKSE:00605) has a Gross Margin % of 94.01% as of Dec. 2025. Gross margin is the ratio of total gross profit to net sales. View historical data on China Financial Services Holdings and its competitors. This is 21% above median its historical median of 77.71. Over the past decade, China Financial Services Holdings' Gross Margin % has ranged from 41.93 to 94.47. According to the industry distribution chart, China Financial Services Holdings ranks #48 out of 389 companies in the Credit Services industry, placing it in the top 12.3%.
Is China Financial Services Holdings' Gross Margin % too high?
China Financial Services Holdings' current Gross Margin % of 94.01% is 21% above median its 10-year median of 77.71. Over the past 10 years, this metric has ranged from a low of 41.93 to a high of 94.47. The Credit Services industry median Gross Margin % is 50.82. China Financial Services Holdings' value of 94.01% is 85% above this industry median. Based on the distribution chart, China Financial Services Holdings ranks #48 out of 389 companies in the Credit Services industry, which is in the top quartile — a strong position relative to peers. Overall, China Financial Services Holdings has a GF Score™ of 42/100 and is considered Significantly Overvalued, reflecting its overall financial health beyond just this single metric.
How does China Financial Services Holdings' Gross Margin % compare to V and MA?
According to the Credit Services industry distribution chart, China Financial Services Holdings ranks #48 out of 389 companies for Gross Margin %. This places China Financial Services Holdings in the top 12% of its industry — outperforming the majority of peers. The industry median Gross Margin % is 50.82. China Financial Services Holdings' value of 94.01% is 85% above this benchmark. Historically, China Financial Services Holdings' own Gross Margin % has ranged from 41.93 to 94.47 over the past decade. While the company's 10-year median is 77.71 vs. the industry median of 50.82, China Financial Services Holdings has consistently been above 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 Credit Services company?
The median Gross Margin % among Credit Services companies is 50.82, based on 389 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. China Financial Services Holdings's current Gross Margin % of 94.01% is 85% above 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 China Financial Services Holdings and its competitors. For the Credit Services industry, the median Gross Margin % is 50.82 — values significantly above this may indicate overvaluation, while values below may suggest a bargain or underlying issues. China Financial Services Holdings's current Gross Margin % is 94.01%, which is 21% above median its own 10-year median of 77.71. However, context matters — high-growth companies often justify higher valuations. Always evaluate alongside other metrics like GF Score™ and GF Value™.
Is China Financial Services Holdings stock overvalued right now?
Based on GuruFocus' analysis, China Financial Services Holdings (HKSE:00605) is currently considered Significantly Overvalued. The stock's GF Value™ is HK$0.47, compared to a current price of HK$0.86 — trading 81.9% above its estimated fair value. The current Gross Margin % is 94.01%, which is 21% above median its 10-year median of 77.71 and 85% above the Credit Services industry median of 50.82. China Financial Services Holdings' overall GF Score™ is 42/100 with 4 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 China Financial Services Holdings (HKSE:00605), the current Gross Margin % is 94.01% 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 China Financial Services Holdings (HKSE:00605) Overvalued in 2026?
Based on GuruFocus' analysis, China Financial Services Holdings stock appears to be overvalued.
The current stock price of HK$0.86 is trading 81.9% above its estimated GF Value™ of HK$0.47.
GuruFocus considers China Financial Services Holdings to be Significantly Overvalued.
Key valuation signals for HKSE:00605:
Gross Margin %: 94.01% (21% above median its 10-year median of 77.71)
GF Value™: HK$0.47 vs. price of HK$0.86 (81.9% above fair value)
Industry Position: 85% above the Credit Services median (#48 of 389)
No single metric tells the full story. See the HKSE:00605 stock analysis page for a complete view including 30-year financials, guru trades, and insider activity.
China Financial Services Holdings Ltd is engaged in the provision of financing services in four operating regions, namely Hong Kong, Shenzhen, Chengdu, and Beijing. The clients are individual customers and corporate customers located in Hong Kong and the PRC. The group identifies potential customers through in-house sales teams, referrals, and networks with commercial banks, property developers, and small-to-medium-sized enterprises. The company's reportable segment are; financing services, and education service. Geographically, revenue is derived from the People's Republic of China.
42GF Score
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Gross Margin % is just one metric. See GF Value™, 30-year financials, guru trades, warning signs, and more.
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