Wecon Holdings (HKSE:01793) Gross Margin % : 4.49% (As of Sep. 2023)

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What is Wecon Holdings Gross Margin %?

Gross Margin % is calculated as gross profit divided by its revenue. Wecon Holdings's Gross Profit for the six months ended in Sep. 2023 was HK$22.2 Mil. Wecon Holdings's Revenue for the six months ended in Sep. 2023 was HK$494.4 Mil. Therefore, Wecon Holdings's Gross Margin % for the quarter that ended in Sep. 2023 was 4.49%.

Warning Sign:

Wecon Holdings Ltd gross margin has been in long-term decline. The average rate of decline per year is -14.3%.

The historical rank and industry rank for Wecon Holdings's Gross Margin % or its related term are showing as below:

HKSE:01793' s Gross Margin % Range Over the Past 10 Years
Min: 4.44 Med: 7.84 Max: 10.08
Current: 4.44

During the past 8 years, the highest Gross Margin % of Wecon Holdings was 10.08%. The lowest was 4.44%. And the median was 7.84%.

HKSE:01793's Gross Margin % is ranked worse than
89.65% of 1613 companies
in the Construction industry
Industry Median: 19.23 vs HKSE:01793: 4.44

Wecon Holdings had a gross margin of 4.49% for the quarter that ended in Sep. 2023 => No sustainable competitive advantage

The 5-Year average Growth Rate of Gross Margin for Wecon Holdings was -14.30% per year.

Wecon Holdings Gross Margin % Historical Data

The historical data trend for Wecon Holdings's Gross 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.

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Wecon Holdings Gross Margin % Chart

Wecon Holdings Annual Data

Trend

Mar16

Mar17

Mar18

Mar19

Mar20

Mar21

Mar22

Mar23

Gross Margin %

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9.23

8.69

5.02

4.65

4.49

Wecon Holdings Semi-Annual Data
	Mar16	Mar17	Mar18	Sep18	Mar19	Sep19	Mar20	Sep20	Mar21	Sep21	Mar22	Sep22	Mar23	Sep23
Gross Margin %	Get a 7-Day Free Trial									6.34	3.18	4.60	4.38	4.49

Competitive Comparison of Wecon Holdings's Gross Margin %

For the Engineering & Construction subindustry, Wecon Holdings'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.

Wecon Holdings's Gross Margin % Distribution in the Construction Industry

For the Construction industry and Industrials sector, Wecon Holdings's Gross Margin % distribution charts can be found below:

* The bar in red indicates where Wecon Holdings's Gross Margin % falls into.

Wecon Holdings Gross Margin % Calculation

Gross Margin is the percentage of Gross Profit out of sales or Revenue.

Wecon Holdings's Gross Margin for the fiscal year that ended in Mar. 2023 is calculated as

Gross Margin % (A: Mar. 2023 )	=	Gross Profit (A: Mar. 2023 )	/	Revenue (A: Mar. 2023 )
	=	39	/	869.032
	=	(Revenue - Cost of Goods Sold)	/	Revenue
	=	(869.032 - 830.011)	/	869.032
	=	4.49 %

Wecon Holdings's Gross Margin for the quarter that ended in Sep. 2023 is calculated as

Gross Margin % (Q: Sep. 2023 )	=	Gross Profit (Q: Sep. 2023 )	/	Revenue (Q: Sep. 2023 )
	=	22.2	/	494.39
	=	(Revenue - Cost of Goods Sold)	/	Revenue
	=	(494.39 - 472.209)	/	494.39
	=	4.49 %

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.

Wecon Holdings (HKSE:01793) 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

Wecon Holdings had a gross margin of 4.49% for the quarter that ended in Sep. 2023 => 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.

Wecon Holdings Gross Margin % Related Terms

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Wecon Holdings (HKSE:01793) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Industrials » Construction » Wecon Holdings Ltd (HKSE:01793) » Definitions » Gross Margin %

Comparable Companies

Traded in Other Exchanges

N/A

Address

244-252 Des Voeux Road Central, 18th Floor, Tung Hip Commercial Building, Hong Kong, HKG

Website

https://www.wecon.com.hk

Wecon Holdings Ltd is an investment holding company. The company's operating segment includes Building construction services and RMAA works services. The Building construction services provided by the group primarily consist of building works for new buildings, including residential, commercial, and industrial buildings. Its RMAA works services include the general upkeep, maintenance, improvement, refurbishment, alteration, and addition of existing facilities and components of buildings and their surroundings. It generates maximum revenue from the Construction contracts segment. Geographically, it derives revenue from Hong Kong.

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