Operating Margin - Guangdong Xinbao Electrical Appliances Holdings Co Ltd (SZSE:002705)

Watchlist Manager

Watchlist

Price: 14.25 CNY -2.8%

Market Cap: 11.6B CNY

Current

Average

5.1%

Industry

Operating Margin represents how efficiently a company is able to generate profit through its core operations.

Higher ratios are generally better, illustrating the company is efficient in its operations and is good at turning sales into profits.

Operating Margin

Operating Profit

1.3B

Revenue

16.4B

Operating Margin Across Competitors

Country		Company	Market Cap	Operating Margin
CN	G	Guangdong Xinbao Electrical Appliances Holdings Co Ltd SZSE:002705	11.6B CNY	8%
JP		Fujitsu General Ltd TSE:6755	4 282 616.6T JPY	3%
CN		Midea Group Co Ltd SZSE:000333	608.3B CNY	10%
CN		Haier Smart Home Co Ltd SSE:600690	249.1B CNY	8%
CN		Gree Electric Appliances Inc of Zhuhai SZSE:000651	229.1B CNY	18%
US	S	Sharkninja Inc NYSE:SN	16.1B USD	13%
IN		LG Electronics India Ltd NSE:LGEINDIA	1.1T INR	9%
IT		De' Longhi SpA MIL:DLG	5.7B EUR	12%
CN	E	Ecovacs Robotics Co Ltd SSE:603486	44.7B CNY	8%
CN	H	Hangzhou Greatstar Industrial Co Ltd SZSE:002444	42.7B CNY	15%
CN		Beijing Roborock Technology Co Ltd SSE:688169	39.8B CNY	7%

Guangdong Xinbao Electrical Appliances Holdings Co Ltd
Glance View

Market Cap

11.6B CNY

Industry

Consumer products

Guangdong Xinbao Electrical Appliances Holdings Co Ltd., often recognized by its brand name "Donlim," has its roots deeply embedded in the thriving manufacturing hub of Guangdong, China. Established in 1995, the company embarked on its journey by capitalizing on the global demand for small domestic appliances. Riding the wave of China's manufacturing prowess, Xinbao quickly expanded its product repertoire, initially focusing on blenders, kettles, and coffee makers. The company's canny strategy of blending cutting-edge technology with cost-efficient manufacturing allowed it to capture significant market shares both domestically and internationally. By fostering key partnerships and leveraging economies of scale, Xinbao deftly navigated the competitive landscape, evolving into a notable player in the global home appliance market. The heart of Xinbao's business model lies in its expansive production capability paired with a robust research and development backbone. This dual focus enables the company to innovate continuously while maintaining an impressive cost structure. The streamlined production efficiencies, coupled with a strategic marketing approach, bolster Xinbao's revenue streams. The firm generates its earnings primarily through sales of its diverse range of small appliances, which are sold under both its proprietary brands and through OEM agreements with global retail giants. By continuously aligning its product offerings with evolving consumer preferences and technological advancements, Xinbao sustains its growth trajectory, ensuring a steady flow of revenue while reinforcing its position as a leader in the home appliance sector.

View Guangdong Xinbao Electrical Appliances Holdings Co Ltd Analysis

Intrinsic Value

What is Intrinsic Value?

Economic Moat is a concept popularized by Warren Buffett to describe a company's durable competitive advantage. It represents the 'moat' that protects a company from competitors and helps it sustain profitability over the long term. Our analysis of the past 10 years showed that companies with a wide economic moat significantly outperformed the market, delivering +645% returns compared to +189% for the S&P 500.

Our research into Economic Moat performance spans the past 10 years and focuses on companies with a wide economic moat. For this analysis, we calculated the average stock price returns of these companies, comparing them to the performance of the S&P 500 index over the same period.

The results were compelling: wide moat stocks achieved a remarkable +645% average return, compared to +188% for the broader market. This difference highlights the long-term benefits of investing in businesses that can maintain their market position and pricing power over time.

Note: This research does not account for survivorship bias. Past performance is not indicative of future results.

Determining whether a company has an economic moat requires both a deep dive into financial metrics and a qualitative assessment of its competitive position. Our analysts conduct a rigorous evaluation that focuses on identifying structural advantages that enable a company to sustain profitability and defend its market share over the long term.

The process begins with an analysis of a company’s historical financial performance. We assess how consistently the company has generated returns above its cost of capital and whether those returns have been stable or improving. However, financial performance alone doesn’t reveal the full picture. To understand the sources of these advantages, we evaluate five key drivers of economic moats:

Network Effect: We analyze whether the value of a company’s product or service grows as its user base expands. Platforms like payment systems or marketplaces benefit from this self-reinforcing.

Switching Costs: We assess whether customers face significant costs or disruptions when switching to a competitor’s product or service. High switching costs create customer stickiness and provide pricing power.

Intangible Assets: Strong brands, patents, and regulatory licenses can protect a company’s market position by creating barriers for competitors or enabling premium pricing. For example, a well-recognized consumer brand may command higher customer loyalty and margins.

Efficient scale: Occurs when a market is optimally served by one or a few players, making it unprofitable for new entrants to compete. This typically happens in industries with high fixed costs or geographic constraints, such as utilities or pipelines.

Cost Advantage: Companies with structural cost advantages can produce goods or services at a lower cost than their competitors, enabling them to offer competitive pricing or maintain higher margins. These advantages often arise from economies of scale, superior supply chain management, or proprietary technology. Firms like Walmart leverage their massive scale to negotiate better terms with suppliers, allowing them to undercut competitors on price.

By examining these factors in combination with a company’s financial performance and market positioning, we classify each company into one of three categories:

This rigorous evaluation ensures that our moat ratings are both comprehensive and reliable, giving investors the tools they need to make well-informed, long-term decisions.

The AI Assistant may sometimes provide inaccurate information.

Make your own investment decisions or consult a licensed financial advisor.

US	Johnson & Johnson NYSE:JNJ	Pharmaceuticals
US	Berkshire Hathaway Inc NYSE:BRK.A	Financial Services
US	Bank of America Corp NYSE:BAC	Banking
US	Mastercard Inc NYSE:MA	Technology
US	UnitedHealth Group Inc NYSE:UNH	Health Care
US	Exxon Mobil Corp NYSE:XOM	Energy
US	Pfizer Inc NYSE:PFE	Pharmaceuticals
US	Palantir Technologies Inc NYSE:PLTR	Technology
US	Nike Inc NYSE:NKE	Textiles, Apparel & Luxury Goods
US	Visa Inc NYSE:V	Technology
CN	Alibaba Group Holding Ltd NYSE:BABA	Retail
US	JPMorgan Chase & Co NYSE:JPM	Banking
US	Coca-Cola Co NYSE:KO	Beverages
US	Walmart Inc NYSE:WMT	Retail
US	Verizon Communications Inc NYSE:VZ	Telecommunication
US	Chevron Corp NYSE:CVX	Energy

	Johnson & Johnson NYSE:JNJ	210.01 USD 1.68%
	Berkshire Hathaway Inc NYSE:BRK.A	742 550 USD 0.99%
	Bank of America Corp NYSE:BAC	54.56 USD 0.89%
	Mastercard Inc NYSE:MA	563.37 USD 4.55%
	UnitedHealth Group Inc NYSE:UNH	336.73 USD 2.55%
	Exxon Mobil Corp NYSE:XOM	119.54 USD

	Franklin Covey Co NYSE:FC	16.65 USD 1.34%
	Mohawk Industries Inc NYSE:MHK	112.66 USD 0.86%
	Ardmore Shipping Corp NYSE:ASC	11.33 USD -0.7%
	ASGN Inc NYSE:ASGN	47.62 USD 2.45%
	Skyworks Solutions Inc NASDAQ:SWKS	68.25 USD -0.81%
	Weatherford International PLC NASDAQ:WFRD	81.21 USD -0.12%

	Johnson & Johnson NYSE:JNJ	210.01 USD 1.68%
	Bank of America Corp NYSE:BAC	54.56 USD 0.89%
	Mastercard Inc NYSE:MA	563.37 USD 4.55%
	Salesforce Inc NYSE:CRM	262.35 USD -0.7%
	Abbvie Inc NYSE:ABBV	223.98 USD -0.53%
	Home Depot Inc NYSE:HD	357.46 USD 1.8%

	Monolithic Power Systems Inc NASDAQ:MPWR	981.48 USD 0.25%
	Applovin Corp NASDAQ:APP	716.98 USD 1.95%
	NVIDIA Corp NASDAQ:NVDA	180.93 USD -1.55%
	Cal-Maine Foods Inc NASDAQ:CALM	87.58 USD 1.88%
	Pro Medicus Ltd ASX:PME	234.43 AUD 0.62%
	Lundin Gold Inc TSX:LUG	111.65 CAD 2.36%

Guangdong Xinbao Electrical Appliances Holdings Co Ltd
SZSE:002705