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Changmao Biochemical Engineering Co (HKSE:00954) 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
Changmao Biochemical Engineering Co had a gross margin of 14.69% for the quarter that ended in Jun. 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.
Changmao Biochemical Engineering Co Gross Margin % Related Terms
Changmao Biochemical Engineering Co 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.
Changmao Biochemical Engineering Co Gross Margin % Chart
HKSE:00954 vs LIN, SHW, ECL: Gross Margin % Comparison
For the Specialty Chemicals subindustry, Changmao Biochemical Engineering Co'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.
Changmao Biochemical Engineering Co Gross Margin % vs Chemicals Industry
For the Chemicals industry and Basic Materials sector, Changmao Biochemical Engineering Co's Gross Margin % distribution charts can be found below:
* The bar in red indicates where Changmao Biochemical Engineering Co'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.
Changmao Biochemical Engineering Co (HKSE:00954) has a Gross Margin % of 14.69% as of Jun. 2026. Gross margin is the ratio of total gross profit to net sales. View historical data on Changmao Biochemical Engineering Co and its competitors. This is near median its historical median of 14.82. Over the past decade, Changmao Biochemical Engineering Co's Gross Margin % has ranged from 2.87 to 27.33. According to the industry distribution chart, Changmao Biochemical Engineering Co ranks #1368 out of 1572 companies in the Chemicals industry, placing it in the top 87%.
Is Changmao Biochemical Engineering Co's Gross Margin % too high?
Changmao Biochemical Engineering Co's current Gross Margin % of 14.69% is near median its 10-year median of 14.82. Over the past 10 years, this metric has ranged from a low of 2.87 to a high of 27.33. The Chemicals industry median Gross Margin % is 24.15. Changmao Biochemical Engineering Co's value of 14.69% is 39.2% below this industry median. Based on the distribution chart, Changmao Biochemical Engineering Co ranks #1368 out of 1572 companies in the Chemicals industry, which is in the bottom quartile relative to peers. Overall, Changmao Biochemical Engineering Co has a GF Score™ of 34/100 and is considered Possible Value Trap, reflecting its overall financial health beyond just this single metric.
How does Changmao Biochemical Engineering Co's Gross Margin % compare to LIN and SHW?
According to the Chemicals industry distribution chart, Changmao Biochemical Engineering Co ranks #1368 out of 1572 companies for Gross Margin %. This places Changmao Biochemical Engineering Co in the lower half of its industry. The industry median Gross Margin % is 24.15. Changmao Biochemical Engineering Co's value of 14.69% is 39.2% below this benchmark. Historically, Changmao Biochemical Engineering Co's own Gross Margin % has ranged from 2.87 to 27.33 over the past decade. While the company's 10-year median is 14.82 vs. the industry median of 24.15, Changmao Biochemical Engineering Co 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 Chemicals company?
The median Gross Margin % among Chemicals companies is 24.15, based on 1,572 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. Changmao Biochemical Engineering Co's current Gross Margin % of 14.69% is 39.2% 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 Changmao Biochemical Engineering Co and its competitors. For the Chemicals industry, the median Gross Margin % is 24.15 — values significantly above this may indicate overvaluation, while values below may suggest a bargain or underlying issues. Changmao Biochemical Engineering Co's current Gross Margin % is 14.69%, which is near median its own 10-year median of 14.82. However, context matters — high-growth companies often justify higher valuations. Always evaluate alongside other metrics like GF Score™ and GF Value™.
Is Changmao Biochemical Engineering Co stock overvalued right now?
Based on GuruFocus' analysis, Changmao Biochemical Engineering Co (HKSE:00954) is currently considered Possible Value Trap. The stock's GF Value™ is HK$0.36, compared to a current price of HK$0.22 — trading 39.4% below its estimated fair value. The current Gross Margin % is 14.69%, which is near median its 10-year median of 14.82 and 39.2% below the Chemicals industry median of 24.15. Changmao Biochemical Engineering Co's overall GF Score™ is 34/100 with 6 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 Changmao Biochemical Engineering Co (HKSE:00954), the current Gross Margin % is 14.69% as of Jun. 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 Changmao Biochemical Engineering Co (HKSE:00954) Overvalued in 2026?
Based on GuruFocus' analysis, Changmao Biochemical Engineering Co stock appears to be undervalued.
The current stock price of HK$0.22 is trading 39.4% below its estimated GF Value™ of HK$0.36.
GuruFocus considers Changmao Biochemical Engineering Co to be Possible Value Trap.
Key valuation signals for HKSE:00954:
Gross Margin %: 14.69% (near median its 10-year median of 14.82)
GF Value™: HK$0.36 vs. price of HK$0.22 (39.4% below fair value)
Industry Position: 39.2% below the Chemicals median (#1368 of 1572)
No single metric tells the full story. See the HKSE:00954 stock analysis page for a complete view including 30-year financials, guru trades, and insider activity.
Changmao Biochemical Engineering Co Ltd is an organic acid producer in the PRC. It produces organic acids products for sale to the food additive, chemical, and pharmaceutical industries. Its products are organic acids and their derivatives with four carbons in their structures including fumaric acid, maleic acid, L-malic acid, D-malic acid, DL-malic acid, L(+)-tartaric acid, D(-)-tartaric acid, DL-tartaric acid, L-aspartic acid, and aspartame. These products are used as food additives or medical intermediaries. Its products are produced along vertical production chains. Its geographic locations include Mainland China, Europe includes Great Britain, Germany, Turkey, Spain, and Italy, Asia Pacific includes Hong Kong, Indonesia, Australia, India, Thailand and Japan, America, and Others.
34GF Score
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