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ZhongTongGuoMai Communication Co (SHSE:603559) 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
ZhongTongGuoMai Communication Co had a gross margin of 7.46% 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.
ZhongTongGuoMai Communication Co Gross Margin % Related Terms
ZhongTongGuoMai Communication 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.
ZhongTongGuoMai Communication Co Gross Margin % Chart
SHSE:603559 vs IBM, ACN, FISV: Gross Margin % Comparison
For the Information Technology Services subindustry, ZhongTongGuoMai Communication 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.
ZhongTongGuoMai Communication Co Gross Margin % vs Software Industry
For the Software industry and Technology sector, ZhongTongGuoMai Communication Co's Gross Margin % distribution charts can be found below:
* The bar in red indicates where ZhongTongGuoMai Communication 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.
ZhongTongGuoMai Communication Co (SHSE:603559) has a Gross Margin % of 7.46% as of Mar. 2026. Gross margin is the ratio of total gross profit to net sales. View historical data on ZhongTongGuoMai Communication Co and its competitors. This is 42% below median its historical median of 12.81. According to the industry distribution chart, ZhongTongGuoMai Communication Co ranks #2560 out of 2690 companies in the Software industry, placing it in the top 95.2%.
Is ZhongTongGuoMai Communication Co's Gross Margin % too high?
ZhongTongGuoMai Communication Co's current Gross Margin % of 7.46% is 42% below median its 10-year median of 12.81. The Software industry median Gross Margin % is 40.50. ZhongTongGuoMai Communication Co's value of 7.46% is 81.6% below this industry median. Based on the distribution chart, ZhongTongGuoMai Communication Co ranks #2560 out of 2690 companies in the Software industry, which is in the bottom quartile relative to peers. Overall, ZhongTongGuoMai Communication Co has a GF Score™ of 41/100 and is considered Significantly Overvalued, reflecting its overall financial health beyond just this single metric.
How does ZhongTongGuoMai Communication Co's Gross Margin % compare to IBM and ACN?
According to the Software industry distribution chart, ZhongTongGuoMai Communication Co ranks #2560 out of 2690 companies for Gross Margin %. This places ZhongTongGuoMai Communication Co in the lower half of its industry. The industry median Gross Margin % is 40.50. ZhongTongGuoMai Communication Co's value of 7.46% is 81.6% below this benchmark. While the company's 10-year median is 12.81 vs. the industry median of 40.50, ZhongTongGuoMai Communication 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 Software company?
The median Gross Margin % among Software companies is 40.50, based on 2,690 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. ZhongTongGuoMai Communication Co's current Gross Margin % of 7.46% is 81.6% 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 ZhongTongGuoMai Communication Co and its competitors. For the Software industry, the median Gross Margin % is 40.50 — values significantly above this may indicate overvaluation, while values below may suggest a bargain or underlying issues. ZhongTongGuoMai Communication Co's current Gross Margin % is 7.46%, which is 42% below median its own 10-year median of 12.81. However, context matters — high-growth companies often justify higher valuations. Always evaluate alongside other metrics like GF Score™ and GF Value™.
Is ZhongTongGuoMai Communication Co stock overvalued right now?
Based on GuruFocus' analysis, ZhongTongGuoMai Communication Co (SHSE:603559) is currently considered Significantly Overvalued. The stock's GF Value™ is ¥4.10, compared to a current price of ¥8.49 — trading 107.1% above its estimated fair value. The current Gross Margin % is 7.46%, which is 42% below median its 10-year median of 12.81 and 81.6% below the Software industry median of 40.50. ZhongTongGuoMai Communication Co's overall GF Score™ is 41/100 with 1 warning sign 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 ZhongTongGuoMai Communication Co (SHSE:603559), the current Gross Margin % is 7.46% 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 ZhongTongGuoMai Communication Co (SHSE:603559) Overvalued in 2026?
Based on GuruFocus' analysis, ZhongTongGuoMai Communication Co stock appears to be overvalued.
The current stock price of ¥8.49 is trading 107.1% above its estimated GF Value™ of ¥4.10.
GuruFocus considers ZhongTongGuoMai Communication Co to be Significantly Overvalued.
Key valuation signals for SHSE:603559:
Gross Margin %: 7.46% (42% below median its 10-year median of 12.81)
GF Value™: ¥4.10 vs. price of ¥8.49 (107.1% above fair value)
Industry Position: 81.6% below the Software median (#2560 of 2690)
No single metric tells the full story. See the SHSE:603559 stock analysis page for a complete view including 30-year financials, guru trades, and insider activity.
ZhongTongGuoMai Communication Co Ltd is the communication technology service provider in China. The company undertakes the communication network engineering consulting, surveying and design and construction activities; and communication network system operation and maintenance services. The communication technology services provided by the company mainly include two types of communication network engineering services and communication network maintenance services. The network engineering service refers to the construction of communication lines and communication pipes at the network level such as the core network, the transmission network and the access network.
41GF Score
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