Operating Margin % is calculated as Operating Income divided by its Revenue. Honghua Group's Operating Income for the
six
months ended in Dec. 2025 was HK$-31 Mil. Honghua Group's Revenue for the
six
months ended in Dec. 2025 was HK$3,195 Mil. Therefore, Honghua Group's Operating Margin % for the quarter that ended in Dec. 2025 was -0.98%.
The historical rank and industry rank for Honghua Group's Operating Margin % or its related term are showing as below:
HKSE:00196'
s Operating Margin % Range Over the Past 10 Years
Min: -22.34 Med: 0.34 Max: 13.8
Current: 0.67
HKSE:00196's Operating Margin % is ranked worse than 71.6% of 919
companies
in the Oil & Gas industry
Industry Median: 6.94
vs HKSE:00196: 0.67
Honghua Group's 5-Year Average Operating Margin % Growth Rate was 0.00% per year.
Honghua Group (HKSE:00196) Operating Margin % Explanation
Just like Gross Margin %, it is important to see a company maintains its operating margin over time. Among the same industry, a company with higher operating margin is more efficient in its operation. It is also more stable during industry slowdown or recessions. Peter Lynch prefers those with higher margins than those with lower margins.
Be Aware
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 Nokias Operating Margin % had already been in decline since 2002, although its Earnings per Share (Diluted) 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.
Honghua Group Operating Margin % Related Terms
Honghua Group Operating Margin % Historical Data
* Premium members only.
The historical data trend for Honghua Group's Operating 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.
HKSE:00196 vs SLB, BKR, HAL: Operating Margin % Comparison
For the Oil & Gas Equipment & Services subindustry, Honghua Group's Operating Margin %, along with its competitors' market caps and Operating 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.
Honghua Group Operating Margin % vs Oil & Gas Industry
For the Oil & Gas industry and Energy sector, Honghua Group's Operating Margin % distribution charts can be found below:
* The bar in red indicates where Honghua Group's Operating Margin % falls into.
Operating Margin % - also known as operating income margin, operating profit margin and return on sales (ROS) - is the ratio of Operating Income divided by net sales or Revenue, usually presented in percent.
Honghua Group's Operating Margin % for the fiscal year that ended in Dec. 2025 is calculated as
* 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.
Honghua Group (HKSE:00196) has a Operating Margin % of -0.98% as of Dec. 2025. Operating margin is the ratio of total operating income to net sales. View historical data on Honghua Group and its competitors. According to the industry distribution chart, Honghua Group ranks #658 out of 919 companies in the Oil & Gas industry, placing it in the top 71.6%.
Is Honghua Group's Operating Margin % too high?
Honghua Group's current Operating Margin % is -0.98%. Based on the distribution chart, Honghua Group ranks #658 out of 919 companies in the Oil & Gas industry, which is below the industry midpoint. Overall, Honghua Group has a GF Score™ of 36/100 and is considered Modestly Overvalued, reflecting its overall financial health beyond just this single metric.
How does Honghua Group's Operating Margin % compare to SLB and BKR?
According to the Oil & Gas industry distribution chart, Honghua Group ranks #658 out of 919 companies for Operating Margin %. This places Honghua Group in the lower half of its industry. The industry median Operating Margin % is 6.94. See the competitive comparison table and distribution chart on this page for a detailed peer-by-peer breakdown.
What is a good Operating Margin % for an Oil & Gas company?
The median Operating Margin % among Oil & Gas companies is 6.94, based on 919 companies in the industry. Companies in the top quartile (top 25%) have a Operating Margin % significantly above this median, while those in the bottom quartile fall well below. However, Operating Margin % should not be evaluated in isolation — investors should consider it alongside profitability, growth, and financial strength metrics. Use the industry distribution chart on this page to see where any company falls relative to its peers.
What does a high Operating Margin % mean?
A high Operating Margin % can signal that a stock is expensive relative to its fundamentals. Operating margin is the ratio of total operating income to net sales. View historical data on Honghua Group and its competitors. For the Oil & Gas industry, the median Operating Margin % is 6.94 — values significantly above this may indicate overvaluation, while values below may suggest a bargain or underlying issues. Honghua Group's current Operating Margin % is -0.98%. However, context matters — high-growth companies often justify higher valuations. Always evaluate alongside other metrics like GF Score™ and GF Value™.
Is Honghua Group stock overvalued right now?
Based on GuruFocus' analysis, Honghua Group (HKSE:00196) is currently considered Modestly Overvalued. The stock's GF Value™ is HK$0.12, compared to a current price of HK$0.15 — trading 25.8% above its estimated fair value. The current Operating Margin % is -0.98%. Honghua Group's overall GF Score™ is 36/100 with 6 warning signs to review. Investors should evaluate multiple metrics — including profitability, growth, and financial strength — before making a decision.
How is Operating Margin % calculated?
Operating Margin % is calculated from a company's financial statements. For Honghua Group (HKSE:00196), the current Operating Margin % is -0.98% as of Dec. 2025. 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 Honghua Group (HKSE:00196) Overvalued in 2026?
Based on GuruFocus' analysis, Honghua Group stock appears to be overvalued.
The current stock price of HK$0.15 is trading 25.8% above its estimated GF Value™ of HK$0.12.
GuruFocus considers Honghua Group to be Modestly Overvalued.
Key valuation signals for HKSE:00196:
Operating Margin %: -0.98%
GF Value™: HK$0.12 vs. price of HK$0.15 (25.8% above fair value)
No single metric tells the full story. See the HKSE:00196 stock analysis page for a complete view including 30-year financials, guru trades, and insider activity.
Honghua Group Ltd is an oil and gas exploration and development equipment manufacturing and drilling engineering services company. Its product portfolio includes land drilling rigs, electric fracturing equipment, core parts and components of drilling and completion equipment, offshore engineering equipment manufacturing, drilling engineering services, digital products for drilling and completion, as well as new energy equipment and comprehensive services for oil and gas fields, providing customers with a full products and services for energy development. Its segments include land drilling rigs, parts and components, and others; drilling engineering services; fracturing services; and offshore engineering. The land drilling rigs segment derives the majority of the revenue.
36GF Score
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Operating Margin % is just one metric. See GF Value™, 30-year financials, guru trades, warning signs, and more.
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