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Gross Margin % is calculated as gross profit divided by its revenue. New Hope Service Holdings's Gross Profit for the six months ended in Dec. 2023 was HK$234 Mil. New Hope Service Holdings's Revenue for the six months ended in Dec. 2023 was HK$723 Mil. Therefore, New Hope Service Holdings's Gross Margin % for the quarter that ended in Dec. 2023 was 32.38%.
Warning Sign:
New Hope Service Holdings Ltd gross margin has been in long-term decline. The average rate of decline per year is -3.7%.
The historical rank and industry rank for New Hope Service Holdings's Gross Margin % or its related term are showing as below:
During the past 6 years, the highest Gross Margin % of New Hope Service Holdings was 42.61%. The lowest was 32.58%. And the median was 41.32%.
New Hope Service Holdings had a gross margin of 32.38% for the quarter that ended in Dec. 2023 => Competition eroding margins
The 5-Year average Growth Rate of Gross Margin for New Hope Service Holdings was -3.70% per year.
The historical data trend for New Hope Service 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.
New Hope Service Holdings Annual Data | |||||||||||||||
Trend | Dec18 | Dec19 | Dec20 | Dec21 | Dec22 | Dec23 | |||||||||
Gross Margin % | Get a 7-Day Free Trial | 41.91 | 42.05 | 40.72 | 37.86 | 34.92 |
New Hope Service Holdings Semi-Annual Data | |||||||||||
Dec18 | Dec19 | Jun20 | Dec20 | Jun21 | Dec21 | Jun22 | Dec22 | Jun23 | Dec23 | Jun24 | |
Gross Margin % | Get a 7-Day Free Trial | 40.84 | 35.42 | 37.72 | 32.38 | 32.77 |
For the Real Estate Services subindustry, New Hope Service 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.
For the Real Estate industry and Real Estate sector, New Hope Service Holdings's Gross Margin % distribution charts can be found below:
* The bar in red indicates where New Hope Service Holdings's Gross Margin % falls into.
Gross Margin is the percentage of Gross Profit out of sales or Revenue.
New Hope Service Holdings's Gross Margin for the fiscal year that ended in Dec. 2023 is calculated as
Gross Margin % (A: Dec. 2023 ) | = | Gross Profit (A: Dec. 2023 ) | / | Revenue (A: Dec. 2023 ) |
= | 481.5 | / | 1378.952 | |
= | (Revenue - Cost of Goods Sold) | / | Revenue | |
= | (1378.952 - 897.455) | / | 1378.952 | |
= | 34.92 % |
New Hope Service Holdings's Gross Margin for the quarter that ended in Dec. 2023 is calculated as
Gross Margin % (Q: Dec. 2023 ) | = | Gross Profit (Q: Dec. 2023 ) | / | Revenue (Q: Dec. 2023 ) |
= | 234.1 | / | 722.92 | |
= | (Revenue - Cost of Goods Sold) | / | Revenue | |
= | (722.92 - 488.855) | / | 722.92 | |
= | 32.38 % |
* 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.
New Hope Service Holdings (HKSE:03658) 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
New Hope Service Holdings had a gross margin of 32.38% for the quarter that ended in Dec. 2023 => Competition eroding margins
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.
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