Shanxi Huayang New Material Co (SHSE:600281) 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
Shanxi Huayang New Material Co had a gross margin of 18.90% 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.
Shanxi Huayang New Material Co Gross Margin % Related Terms
Shanxi Huayang New Material 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.
Shanxi Huayang New Material Co Gross Margin % Chart
For the Chemicals subindustry, Shanxi Huayang New Material 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.
Shanxi Huayang New Material Co Gross Margin % vs Chemicals Industry
For the Chemicals industry and Basic Materials sector, Shanxi Huayang New Material Co's Gross Margin % distribution charts can be found below:
* The bar in red indicates where Shanxi Huayang New Material 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.
Shanxi Huayang New Material Co (SHSE:600281) has a Gross Margin % of 18.90% as of Mar. 2026. Gross margin is the ratio of total gross profit to net sales. View historical data on Shanxi Huayang New Material Co and its competitors. This is 343% above median its historical median of 4.27. According to the industry distribution chart, Shanxi Huayang New Material Co ranks #1294 out of 1560 companies in the Chemicals industry, placing it in the top 82.9%.
Is Shanxi Huayang New Material Co's Gross Margin % too high?
Shanxi Huayang New Material Co's current Gross Margin % of 18.90% is 343% above median its 10-year median of 4.27. The Chemicals industry median Gross Margin % is 23.36. Shanxi Huayang New Material Co's value of 18.90% is 19.1% below this industry median. Based on the distribution chart, Shanxi Huayang New Material Co ranks #1294 out of 1560 companies in the Chemicals industry, which is in the bottom quartile relative to peers. Overall, Shanxi Huayang New Material Co has a GF Score™ of 32/100 and is considered Possible Value Trap, reflecting its overall financial health beyond just this single metric.
How does Shanxi Huayang New Material Co's Gross Margin % compare to DOW?
According to the Chemicals industry distribution chart, Shanxi Huayang New Material Co ranks #1294 out of 1560 companies for Gross Margin %. This places Shanxi Huayang New Material Co in the lower half of its industry. The industry median Gross Margin % is 23.36. Shanxi Huayang New Material Co's value of 18.90% is 19.1% below this benchmark. While the company's 10-year median is 4.27 vs. the industry median of 23.36, Shanxi Huayang New Material 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 23.36, based on 1,560 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. Shanxi Huayang New Material Co's current Gross Margin % of 18.90% is 19.1% 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 Shanxi Huayang New Material Co and its competitors. For the Chemicals industry, the median Gross Margin % is 23.36 — values significantly above this may indicate overvaluation, while values below may suggest a bargain or underlying issues. Shanxi Huayang New Material Co's current Gross Margin % is 18.90%, which is 343% above median its own 10-year median of 4.27. However, context matters — high-growth companies often justify higher valuations. Always evaluate alongside other metrics like GF Score™ and GF Value™.
Is Shanxi Huayang New Material Co stock overvalued right now?
Based on GuruFocus' analysis, Shanxi Huayang New Material Co (SHSE:600281) is currently considered Possible Value Trap. The stock's GF Value™ is ¥6.66, compared to a current price of ¥4.18 — trading 37.2% below its estimated fair value. The current Gross Margin % is 18.90%, which is 343% above median its 10-year median of 4.27 and 19.1% below the Chemicals industry median of 23.36. Shanxi Huayang New Material Co's overall GF Score™ is 32/100 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 Shanxi Huayang New Material Co (SHSE:600281), the current Gross Margin % is 18.90% 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 Shanxi Huayang New Material Co (SHSE:600281) Overvalued in 2026?
Based on GuruFocus' analysis, Shanxi Huayang New Material Co stock appears to be undervalued.
The current stock price of ¥4.18 is trading 37.2% below its estimated GF Value™ of ¥6.66.
GuruFocus considers Shanxi Huayang New Material Co to be Possible Value Trap.
Key valuation signals for SHSE:600281:
Gross Margin %: 18.90% (343% above median its 10-year median of 4.27)
GF Value™: ¥6.66 vs. price of ¥4.18 (37.2% below fair value)
Industry Position: 19.1% below the Chemicals median (#1294 of 1560)
No single metric tells the full story. See the SHSE:600281 stock analysis page for a complete view including 30-year financials, guru trades, and insider activity.
Shanxi Huayang New Material Co Business Description
Shanxi Huayang New Material Co Ltd Taiyuan Chemical Industry Co Ltd is engaged in the research, production, and sale of chemical products. Its main products are deep coke processing products, chemical fertilizers, coal tar processing products, and biochemical products.
32GF Score
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