Hengong Precision Equipment Co (SZSE:301261) Operating Income : ¥116 Mil (TTM As of Mar. 2025)

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What is Hengong Precision Equipment Co Operating Income?

Hengong Precision Equipment Co's Operating Income for the three months ended in Mar. 2025 was ¥24 Mil. Its Operating Income for the trailing twelve months (TTM) ended in Mar. 2025 was ¥116 Mil.

Operating Margin % is calculated as Operating Income divided by its Revenue. Hengong Precision Equipment Co's Operating Income for the three months ended in Mar. 2025 was ¥24 Mil. Hengong Precision Equipment Co's Revenue for the three months ended in Mar. 2025 was ¥238 Mil. Therefore, Hengong Precision Equipment Co's Operating Margin % for the quarter that ended in Mar. 2025 was 10.13%.

Warning Sign:

Hengong Precision Equipment Co Ltd operating margin has been in a 5-year decline. The average rate of decline per year is -7.7%.

Hengong Precision Equipment Co's 5-Year average Growth Rate for Operating Margin % was -7.70% per year.

Operating Income or EBIT is linked to Return on Capital for both regular definition and Joel Greenblatt's definition. Hengong Precision Equipment Co's annualized ROC % for the quarter that ended in Mar. 2025 was 3.67%. Hengong Precision Equipment Co's annualized ROC (Joel Greenblatt) % for the quarter that ended in Mar. 2025 was 8.20%.

Hengong Precision Equipment Co Operating Income Historical Data

The historical data trend for Hengong Precision Equipment Co's Operating Income 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.

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Hengong Precision Equipment Co Operating Income Chart

Hengong Precision Equipment Co Annual Data

Trend

Dec18

Dec19

Dec20

Dec21

Dec22

Dec23

Dec24

Operating Income

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83.73

878.47

129.27

141.35

130.84

Hengong Precision Equipment Co Quarterly Data
	Dec18	Dec19	Dec20	Mar21	Jun21	Sep21	Dec21	Mar22	Jun22	Sep22	Dec22	Mar23	Jun23	Sep23	Dec23	Mar24	Jun24	Sep24	Dec24	Mar25
Operating Income	Get a 7-Day Free Trial															39.10	41.11	20.66	29.99	24.06

Hengong Precision Equipment Co Operating Income Calculation

Operating Income, is the profit a company earned through operations. All expenses, including cash expenses such as cost of goods sold (COGS), research & development, wages, and non-cash expenses, such as depreciation, depletion and amortization, have been deducted from the sales.

Operating Income for the trailing twelve months (TTM) ended in Mar. 2025 adds up the quarterly data reported by the company within the most recent 12 months, which was ¥116 Mil.

Hengong Precision Equipment Co (SZSE:301261) Operating Income Explanation

1. Operating Income or EBIT is linked to Return on Capital for both regular definition and Joel Greenblatt's definition.

Hengong Precision Equipment Co's annualized ROC % for the quarter that ended in Mar. 2025 is calculated as:

	ROC % (Q: Mar. 2025 )
=	NOPAT	/	Average Invested Capital
=	Operating Income * ( 1 - Tax Rate % )	/	( (Invested Capital (Q: Dec. 2024 )	+	Invested Capital (Q: Mar. 2025 ))	/ count )
=	96.228 * ( 1 - 2.79% )	/	( (2344.429	+	2758.821)	/ 2 )
=	93.5432388	/	2551.625
=	3.67 %

where

	Invested Capital		(Q: Dec. 2024 )
=	Total Assets	-	Accounts Payable & Accrued Expense	-	Excess Cash
=	Total Assets	-	Accounts Payable & Accrued Expense	-	( Cash, Cash Equivalents, Marketable Securities	-	max(0, Total Current Liabilities	-	Total Current Assets	+	Cash, Cash Equivalents, Marketable Securities	))
=	2737.63	-	186.44	-	( 590.801	-	max(0, 1091.103	-	1297.864	+	590.801	))
=	2344.429

	Invested Capital		(Q: Mar. 2025 )
=	Total Assets	-	Accounts Payable & Accrued Expense	-	Excess Cash
=	Total Assets	-	Accounts Payable & Accrued Expense	-	( Cash, Cash Equivalents, Marketable Securities	-	max(0, Total Current Liabilities	-	Total Current Assets	+	Cash, Cash Equivalents, Marketable Securities	))
=	3122.224	-	213.308	-	( 601.12	-	max(0, 1510.795	-	1660.89	+	601.12	))
=	2758.821

Note: The Operating Income data used here is four times the quarterly (Mar. 2025) data.

2. Joel Greenblatt's definition of Return on Capital:

Hengong Precision Equipment Co's annualized ROC (Joel Greenblatt) % for the quarter that ended in Mar. 2025 is calculated as:

	ROC (Joel Greenblatt) %		(Q: Mar. 2025 )
=	EBIT	/	Average of (Net fixed Assets	+	Net Working Capital)
=	EBIT	/	Average of (Property, Plant and Equipment	+	Net Working Capital)
			Q: Dec. 2024		Q: Mar. 2025
=	EBIT	/	( ( (Property, Plant and Equipment + Net Working Capital)	+	(Property, Plant and Equipment + Net Working Capital) )	/	count )
=	105.244	/	( ( (818.837 + max(278.582, 0))	+	(919.062 + max(549.824, 0)) )	/	2 )
=	105.244	/	( ( 1097.419	+	1468.886 )	/	2 )
=	105.244	/	1283.1525
=	8.20 %

where Working Capital is:

	Working Capital		(Q: Dec. 2024 )
=	(Accounts Receivable	+	Total Inventories	+	Other Current Assets)	-	(Accounts Payable & Accrued Expense	+	Defer. Rev.	+	Other Current Liabilities)
=	(226.667	+	210.446	+	126.283)	-	(186.44	+	0	+	98.374)
=	278.582

	Working Capital		(Q: Mar. 2025 )
=	(Accounts Receivable	+	Total Inventories	+	Other Current Assets)	-	(Accounts Payable & Accrued Expense	+	Defer. Rev.	+	Other Current Liabilities)
=	(224.763	+	221.659	+	425.511)	-	(213.308	+	0	+	108.801)
=	549.824

When net working capital is negative, 0 is used.

Note: The EBIT data used here is four times the quarterly (Mar. 2025) EBIT data.

3. Operating Income is also linked to Operating Margin %:

Hengong Precision Equipment Co's Operating Margin % for the quarter that ended in Mar. 2025 is calculated as:

Operating Margin %	=	Operating Income (Q: Mar. 2025 )	/	Revenue (Q: Mar. 2025 )
	=	24.057	/	237.586
	=	10.13 %

4. Please click Growth Rate Calculation Example (GuruFocus) to see how GuruFocus calculates Wal-Mart Stores Inc (WMT)'s revenue growth rate. You can apply the same method to get the Operating Income growth rate using Operating Income per share data.

Be Aware

Compared with a company's EBITDA margin, Operating Margin can be manipulated by adjusting the rate of depreciation, depletion and amortization (DDA).

If a company is facing competition, its Operating Margin may decline. Often the Operating Margin declines well before the company's revenue or even profit decline. Therefore, Operating Margin is a very important indicator of whether the company is facing problems.

For instance, by 2012, Nokia (NOK)'s problems were well known and its stock had lost more than 90% of its market value since 2007. But Nokia's Operating Margin had already been in decline since 2002, although its earnings per share were still rising. Investors who paid attention to Operating Margin would have avoided this huge loss. The same can be said for Research-in-Motion (RIMM).

Therefore, Operating Margin is a very important screening filter for GuruFocus. GuruFocus's Buffett-Munger screener requires that the profit margin is either consistent or expanding. The Model Portfolio of the Buffett-Munger screener has outperformed the market every year since inception in 2009.

Hengong Precision Equipment Co Operating Income Related Terms

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Hengong Precision Equipment Co Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Industrials » Industrial Products » Hengong Precision Equipment Co Ltd (SZSE:301261) » Definitions » Operating Income

Traded in Other Exchanges

N/A

Address

Shangcheng Town Industrial Park, Cheng'an County, Hebei Province, Handan, CHN, 056700

Website

https://www.hengong-bar.com

Hengong Precision Equipment Co Ltd is engaged in the research and development, production and sales of precision machined parts and continuous iron castings.

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