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Ernest Borel Holdings (HKSE:01856) 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
Ernest Borel Holdings had a gross margin of -7.25% for the quarter that ended in Dec. 2025 => 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.
Ernest Borel Holdings Gross Margin % Related Terms
Ernest Borel Holdings Gross Margin % Historical Data
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The historical data trend for Ernest Borel 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.
For the Luxury Goods subindustry, Ernest Borel 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.
Ernest Borel Holdings Gross Margin % vs Retail - Cyclical Industry
For the Retail - Cyclical industry and Consumer Cyclical sector, Ernest Borel Holdings's Gross Margin % distribution charts can be found below:
* The bar in red indicates where Ernest Borel 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.
Ernest Borel Holdings (HKSE:01856) has a Gross Margin % of -7.25% as of Dec. 2025. Gross margin is the ratio of total gross profit to net sales. View historical data on Ernest Borel Holdings and its competitors. Over the past decade, Ernest Borel Holdings' Gross Margin % has ranged from 4.11 to 60.86. According to the industry distribution chart, Ernest Borel Holdings ranks #1071 out of 1119 companies in the Retail - Cyclical industry, placing it in the top 95.7%.
Is Ernest Borel Holdings' Gross Margin % too high?
Ernest Borel Holdings' current Gross Margin % is -7.25%. Over the past 10 years, this metric has ranged from a low of 4.11 to a high of 60.86. Based on the distribution chart, Ernest Borel Holdings ranks #1071 out of 1119 companies in the Retail - Cyclical industry, which is in the bottom quartile relative to peers. Overall, Ernest Borel Holdings has a GF Score™ of 25/100 and is considered Significantly Overvalued, reflecting its overall financial health beyond just this single metric.
How does Ernest Borel Holdings' Gross Margin % compare to TPR?
According to the Retail - Cyclical industry distribution chart, Ernest Borel Holdings ranks #1071 out of 1119 companies for Gross Margin %. This places Ernest Borel Holdings in the lower half of its industry. The industry median Gross Margin % is 36.32. Historically, Ernest Borel Holdings' own Gross Margin % has ranged from 4.11 to 60.86 over the past decade. 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 Retail - Cyclical company?
The median Gross Margin % among Retail - Cyclical companies is 36.32, based on 1,119 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. 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 Ernest Borel Holdings and its competitors. For the Retail - Cyclical industry, the median Gross Margin % is 36.32 — values significantly above this may indicate overvaluation, while values below may suggest a bargain or underlying issues. Ernest Borel Holdings's current Gross Margin % is -7.25%. However, context matters — high-growth companies often justify higher valuations. Always evaluate alongside other metrics like GF Score™ and GF Value™.
Is Ernest Borel Holdings stock overvalued right now?
Based on GuruFocus' analysis, Ernest Borel Holdings (HKSE:01856) is currently considered Significantly Overvalued. The stock's GF Value™ is HK$0.84, compared to a current price of HK$1.62 — trading 92.3% above its estimated fair value. The current Gross Margin % is -7.25%. Ernest Borel Holdings' overall GF Score™ is 25/100 with 8 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 Ernest Borel Holdings (HKSE:01856), the current Gross Margin % is -7.25% 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 Ernest Borel Holdings (HKSE:01856) Overvalued in 2026?
Based on GuruFocus' analysis, Ernest Borel Holdings stock appears to be overvalued.
The current stock price of HK$1.62 is trading 92.3% above its estimated GF Value™ of HK$0.84.
GuruFocus considers Ernest Borel Holdings to be Significantly Overvalued.
Key valuation signals for HKSE:01856:
Gross Margin %: -7.25%
GF Value™: HK$0.84 vs. price of HK$1.62 (92.3% above fair value)
No single metric tells the full story. See the HKSE:01856 stock analysis page for a complete view including 30-year financials, guru trades, and insider activity.
Ernest Borel Holdings Ltd is an investment company engaged in designing, manufacturing, marketing, and selling Swiss-made mechanical and quartz premium watches for men and women, and smart watch accessories R&D, OEM, and manufacturing. The smart watch manufacturing business delivers synergies with the Group's core operations by providing essential watch cases and other components for watchmaking activities. Its segments are: Watches business segment, which engages in manufacturing and sales of watches; and Smart watch manufacturing business segment, which generates maximum revenue and engages in design, development, and manufacturing of stainless-steel alloy watch cases and smartwatch cases on ODM and OEM basis. The Group generates the majority of its revenue from the PRC.
25GF Score
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