Sinopec Oilfield Service (SHSE:600871) 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
Sinopec Oilfield Service had a gross margin of 8.59% 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.
Sinopec Oilfield Service Gross Margin % Related Terms
Sinopec Oilfield Service 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.
SHSE:600871 vs NE, RIG, VAL: Gross Margin % Comparison
For the Oil & Gas Drilling subindustry, Sinopec Oilfield Service'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.
Sinopec Oilfield Service Gross Margin % vs Oil & Gas Industry
For the Oil & Gas industry and Energy sector, Sinopec Oilfield Service's Gross Margin % distribution charts can be found below:
* The bar in red indicates where Sinopec Oilfield Service'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.
Sinopec Oilfield Service (SHSE:600871) has a Gross Margin % of 8.59% as of Mar. 2026. Gross margin is the ratio of total gross profit to net sales. View historical data on Sinopec Oilfield Service and its competitors. This is 13% above median its historical median of 7.58. According to the industry distribution chart, Sinopec Oilfield Service ranks #709 out of 871 companies in the Oil & Gas industry, placing it in the top 81.4%.
Is Sinopec Oilfield Service's Gross Margin % too high?
Sinopec Oilfield Service's current Gross Margin % of 8.59% is 13% above median its 10-year median of 7.58. The Oil & Gas industry median Gross Margin % is 25.70. Sinopec Oilfield Service's value of 8.59% is 66.6% below this industry median. Based on the distribution chart, Sinopec Oilfield Service ranks #709 out of 871 companies in the Oil & Gas industry, which is in the bottom quartile relative to peers. Overall, Sinopec Oilfield Service has a GF Score™ of 74/100 and is considered Fairly Valued, reflecting its overall financial health beyond just this single metric.
How does Sinopec Oilfield Service's Gross Margin % compare to NE and RIG?
According to the Oil & Gas industry distribution chart, Sinopec Oilfield Service ranks #709 out of 871 companies for Gross Margin %. This places Sinopec Oilfield Service in the lower half of its industry. The industry median Gross Margin % is 25.70. Sinopec Oilfield Service's value of 8.59% is 66.6% below this benchmark. While the company's 10-year median is 7.58 vs. the industry median of 25.70, Sinopec Oilfield Service 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 an Oil & Gas company?
The median Gross Margin % among Oil & Gas companies is 25.70, based on 871 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. Sinopec Oilfield Service's current Gross Margin % of 8.59% is 66.6% 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 Sinopec Oilfield Service and its competitors. For the Oil & Gas industry, the median Gross Margin % is 25.70 — values significantly above this may indicate overvaluation, while values below may suggest a bargain or underlying issues. Sinopec Oilfield Service's current Gross Margin % is 8.59%, which is 13% above median its own 10-year median of 7.58. However, context matters — high-growth companies often justify higher valuations. Always evaluate alongside other metrics like GF Score™ and GF Value™.
Is Sinopec Oilfield Service stock overvalued right now?
Based on GuruFocus' analysis, Sinopec Oilfield Service (SHSE:600871) is currently considered Fairly Valued. The stock's GF Value™ is ¥2.16, compared to a current price of ¥2.06 — trading 4.6% below its estimated fair value. The current Gross Margin % is 8.59%, which is 13% above median its 10-year median of 7.58 and 66.6% below the Oil & Gas industry median of 25.70. Sinopec Oilfield Service's overall GF Score™ is 74/100 with 5 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 Sinopec Oilfield Service (SHSE:600871), the current Gross Margin % is 8.59% 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 Sinopec Oilfield Service (SHSE:600871) Overvalued in 2026?
Based on GuruFocus' analysis, Sinopec Oilfield Service stock appears to be undervalued.
The current stock price of ¥2.06 is trading 4.6% below its estimated GF Value™ of ¥2.16.
GuruFocus considers Sinopec Oilfield Service to be Fairly Valued.
Key valuation signals for SHSE:600871:
Gross Margin %: 8.59% (13% above median its 10-year median of 7.58)
GF Value™: ¥2.16 vs. price of ¥2.06 (4.6% below fair value)
Industry Position: 66.6% below the Oil & Gas median (#709 of 871)
No single metric tells the full story. See the SHSE:600871 stock analysis page for a complete view including 30-year financials, guru trades, and insider activity.
Sinopec Oilfield Service Corp engages in the provision of onshore and offshore oil and natural gas, exploration, provision of contracting, design, and construction services for the oil and gas projects. It operates through five segments: Geophysics, which provides technical and development, exploration geophysical services; Drilling engineering segment, which provides drilling design, and construction, technical services; Logging and mud logging segment; Special downhole segment, which provides oil engineering technical and construction services; and Engineering construction segment, which provides a package of services, including feasibility studies, procurement, and others. Its geographical segments are, The PRC, Middle East and Other countries.
74GF Score
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