Shandong Hualu-hengsheng Chemical Co (SHSE:600426) 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.
Shandong Hualu-hengsheng Chemical Co Operating Margin % Related Terms
Shandong Hualu-hengsheng Chemical Co 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.
Shandong Hualu-hengsheng Chemical Co Operating Margin % Chart
For the Chemicals subindustry, Shandong Hualu-hengsheng Chemical Co'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.
Shandong Hualu-hengsheng Chemical Co Operating Margin % vs Chemicals Industry
For the Chemicals industry and Basic Materials sector, Shandong Hualu-hengsheng Chemical Co's Operating Margin % distribution charts can be found below:
* The bar in red indicates where Shandong Hualu-hengsheng Chemical Co's Operating Margin % falls into.
Shandong Hualu-hengsheng Chemical Co 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.
Shandong Hualu-hengsheng Chemical Co (SHSE:600426) has a Operating Margin % of 17.74% as of Mar. 2026. Operating margin is the ratio of total operating income to net sales. View historical data on Shandong Hualu-hengsheng Chemical Co and its competitors. This is near median its historical median of 16.72. Over the past decade, Shandong Hualu-hengsheng Chemical Co's Operating Margin % has ranged from 14.78 to 32.28. According to the industry distribution chart, Shandong Hualu-hengsheng Chemical Co ranks #239 out of 1585 companies in the Chemicals industry, placing it in the top 15.1%.
Is Shandong Hualu-hengsheng Chemical Co's Operating Margin % too high?
Shandong Hualu-hengsheng Chemical Co's current Operating Margin % of 17.74% is near median its 10-year median of 16.72. Over the past 10 years, this metric has ranged from a low of 14.78 to a high of 32.28. The Chemicals industry median Operating Margin % is 6.02. Shandong Hualu-hengsheng Chemical Co's value of 17.74% is 194.7% above this industry median. Based on the distribution chart, Shandong Hualu-hengsheng Chemical Co ranks #239 out of 1585 companies in the Chemicals industry, which is in the top quartile — a strong position relative to peers. Overall, Shandong Hualu-hengsheng Chemical Co has a GF Score™ of 96/100 and is considered Modestly Undervalued, reflecting its overall financial health beyond just this single metric.
How does Shandong Hualu-hengsheng Chemical Co's Operating Margin % compare to DOW?
According to the Chemicals industry distribution chart, Shandong Hualu-hengsheng Chemical Co ranks #239 out of 1585 companies for Operating Margin %. This places Shandong Hualu-hengsheng Chemical Co in the top 15% of its industry — outperforming the majority of peers. The industry median Operating Margin % is 6.02. Shandong Hualu-hengsheng Chemical Co's value of 17.74% is 194.7% above this benchmark. Historically, Shandong Hualu-hengsheng Chemical Co's own Operating Margin % has ranged from 14.78 to 32.28 over the past decade. While the company's 10-year median is 16.72 vs. the industry median of 6.02, Shandong Hualu-hengsheng Chemical Co 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 a Chemicals company?
The median Operating Margin % among Chemicals companies is 6.02, based on 1,585 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. Shandong Hualu-hengsheng Chemical Co's current Operating Margin % of 17.74% is 194.7% 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 Shandong Hualu-hengsheng Chemical Co and its competitors. For the Chemicals industry, the median Operating Margin % is 6.02 — values significantly above this may indicate overvaluation, while values below may suggest a bargain or underlying issues. Shandong Hualu-hengsheng Chemical Co's current Operating Margin % is 17.74%, which is near median its own 10-year median of 16.72. However, context matters — high-growth companies often justify higher valuations. Always evaluate alongside other metrics like GF Score™ and GF Value™.
Is Shandong Hualu-hengsheng Chemical Co stock overvalued right now?
Based on GuruFocus' analysis, Shandong Hualu-hengsheng Chemical Co (SHSE:600426) is currently considered Modestly Undervalued. The stock's GF Value™ is ¥30.31, compared to a current price of ¥25.09 — trading 17.2% below its estimated fair value. The current Operating Margin % is 17.74%, which is near median its 10-year median of 16.72 and 194.7% above the Chemicals industry median of 6.02. Shandong Hualu-hengsheng Chemical Co's overall GF Score™ is 96/100 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 Shandong Hualu-hengsheng Chemical Co (SHSE:600426), the current Operating Margin % is 17.74% 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 Shandong Hualu-hengsheng Chemical Co (SHSE:600426) Overvalued in 2026?
Based on GuruFocus' analysis, Shandong Hualu-hengsheng Chemical Co stock appears to be undervalued.
The current stock price of ¥25.09 is trading 17.2% below its estimated GF Value™ of ¥30.31.
GuruFocus considers Shandong Hualu-hengsheng Chemical Co to be Modestly Undervalued.
Key valuation signals for SHSE:600426:
Operating Margin %: 17.74% (near median its 10-year median of 16.72)
GF Value™: ¥30.31 vs. price of ¥25.09 (17.2% below fair value)
Industry Position: 194.7% above the Chemicals median (#239 of 1585)
No single metric tells the full story. See the SHSE:600426 stock analysis page for a complete view including 30-year financials, guru trades, and insider activity.
Shandong Hualu-hengsheng Chemical Co Business Description
Shandong Hualu-Hengsheng Chemical Co Ltd is engaged in the production and sale of chemical products and chemical fertilizers, as well as power generation and heating businesses. The company's main products include new energy and new materials related products such as caprolactam, adipic acid, and others, chemical fertilizers such as urea and others, organic amines such as dimethylformamide (DMF), monomethylamine, and others, and acetic acid and derivatives products such as acetic acid, acetic anhydride, and others.
96GF 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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