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Shanghai Gench Education Group (HKSE:01525) 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.
Shanghai Gench Education Group Operating Margin % Related Terms
Shanghai Gench Education Group Operating 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.
Shanghai Gench Education Group Operating Margin % Chart
HKSE:01525 vs EDU, TAL, LAUR: Operating Margin % Comparison
For the Education & Training Services subindustry, Shanghai Gench Education 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.
Shanghai Gench Education Group Operating Margin % vs Education Industry
For the Education industry and Consumer Defensive sector, Shanghai Gench Education Group's Operating Margin % distribution charts can be found below:
* The bar in red indicates where Shanghai Gench Education Group's Operating Margin % falls into.
Shanghai Gench Education Group Operating Margin % Calculation
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.
* 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.
Shanghai Gench Education Group (HKSE:01525) has a Operating Margin % of 19.83% as of Dec. 2025. Operating margin is the ratio of total operating income to net sales. View historical data on Shanghai Gench Education Group and its competitors. This is 44% below median its historical median of 35.59. Over the past decade, Shanghai Gench Education Group's Operating Margin % has ranged from 20.20 to 44.52. According to the industry distribution chart, Shanghai Gench Education Group ranks #34 out of 255 companies in the Education industry, placing it in the top 13.3%.
Is Shanghai Gench Education Group's Operating Margin % too high?
Shanghai Gench Education Group's current Operating Margin % of 19.83% is 44% below median its 10-year median of 35.59. Over the past 10 years, this metric has ranged from a low of 20.20 to a high of 44.52. The Education industry median Operating Margin % is 9.74. Shanghai Gench Education Group's value of 19.83% is 103.6% above this industry median. Based on the distribution chart, Shanghai Gench Education Group ranks #34 out of 255 companies in the Education industry, which is in the top quartile — a strong position relative to peers. Overall, Shanghai Gench Education Group has a GF Score™ of 80/100 and is considered Modestly Undervalued, reflecting its overall financial health beyond just this single metric.
How does Shanghai Gench Education Group's Operating Margin % compare to EDU and TAL?
According to the Education industry distribution chart, Shanghai Gench Education Group ranks #34 out of 255 companies for Operating Margin %. This places Shanghai Gench Education Group in the top 13% of its industry — outperforming the majority of peers. The industry median Operating Margin % is 9.74. Shanghai Gench Education Group's value of 19.83% is 103.6% above this benchmark. Historically, Shanghai Gench Education Group's own Operating Margin % has ranged from 20.20 to 44.52 over the past decade. While the company's 10-year median is 35.59 vs. the industry median of 9.74, Shanghai Gench Education Group has consistently been above 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 Operating Margin % for an Education company?
The median Operating Margin % among Education companies is 9.74, based on 255 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. Shanghai Gench Education Group's current Operating Margin % of 19.83% is 103.6% above 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 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 Shanghai Gench Education Group and its competitors. For the Education industry, the median Operating Margin % is 9.74 — values significantly above this may indicate overvaluation, while values below may suggest a bargain or underlying issues. Shanghai Gench Education Group's current Operating Margin % is 19.83%, which is 44% below median its own 10-year median of 35.59. However, context matters — high-growth companies often justify higher valuations. Always evaluate alongside other metrics like GF Score™ and GF Value™.
Is Shanghai Gench Education Group stock overvalued right now?
Based on GuruFocus' analysis, Shanghai Gench Education Group (HKSE:01525) is currently considered Modestly Undervalued. The stock's GF Value™ is HK$3.48, compared to a current price of HK$2.48 — trading 28.7% below its estimated fair value. The current Operating Margin % is 19.83%, which is 44% below median its 10-year median of 35.59 and 103.6% above the Education industry median of 9.74. Shanghai Gench Education Group's overall GF Score™ is 80/100 with 4 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 Shanghai Gench Education Group (HKSE:01525), the current Operating Margin % is 19.83% 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 Shanghai Gench Education Group (HKSE:01525) Overvalued in 2026?
Based on GuruFocus' analysis, Shanghai Gench Education Group stock appears to be undervalued.
The current stock price of HK$2.48 is trading 28.7% below its estimated GF Value™ of HK$3.48.
GuruFocus considers Shanghai Gench Education Group to be Modestly Undervalued.
Key valuation signals for HKSE:01525:
Operating Margin %: 19.83% (44% below median its 10-year median of 35.59)
GF Value™: HK$3.48 vs. price of HK$2.48 (28.7% below fair value)
Industry Position: 103.6% above the Education median (#34 of 255)
No single metric tells the full story. See the HKSE:01525 stock analysis page for a complete view including 30-year financials, guru trades, and insider activity.
Shanghai Gench Education Group Business Description
Shanghai Gench Education Group Ltd and its subsidiaries are engaged in providing undergraduate education and junior college educations. The group generates its revenue from tuition fees, boarding fees, and other education-related services. Geographically, the company generates all of its revenue from the People's Republic of China.
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