5 Companies with Gross Profit Margin above 60% for the past 3 years

A high gross profit margin measures the efficiency of a firm's production process. A good, or higher, percentage gross profit margin demonstrates how a company can produce their product/service offerings more efficiently.

In this article, we will be looking at 5 companies with Gross Profit Margin 60% for the past 3 years:

• Centurion Corporation Limited (SGX: OU8)
• Cordlife Group Limited (SGX: P8A)
• Ho Bee Land Limited (SGX: H13)
• Jumbo Group Limited (SGX: 42R)
• TalkMed Group Limited (SGX: 5G3)

1) Centurion Corporation Limited (SGX: OU8)

Centurion Corporation Limited (“Centurion”) owns, develops and manages quality, purpose-built workers accommodation assets in Singapore and Malaysia, and student accommodation assets in Australia, South Korea, the United Kingdom (“UK”) and the United States (“US”). The Group owns and manages a strong portfolio of 35 operational accommodation assets totaling approximately 76,961 beds as of 30 September 2021.

After experiencing a rise in gross profit margin to 72.69% for FY2019, Centurion’s gross profit margin has dipped slightly to 69.80% for FY2020. The lower gross profit margin can be attributed to the lower revenue, coupled with the additional expenses incurred to manage the COVID-19 situation.

Centurion’s share price last traded at S$0.33, with a market capitalization of S$277.45 million.

2) Cordlife Group Limited (SGX: P8A)

Established in May 2001, Cordlife Group Limited (“Cordlife”) is a leading company dedicated to safeguarding the well-being of mother and child. The Group has been listed on the Mainboard of the Singapore Exchange since 2012 and is a pioneer in private cord blood banking in Asia. Cordlife owns the largest network of cord blood banks in Asia with full stem cell banking facilities in six key markets namely Singapore, Hong Kong, Indonesia, India, Malaysia and the Philippines.

For the past few financial years, Cordlife’s gross profit margin has declined from 67.67% in FY2018 to 62.95% in FY2020.

The lower gross profit margin across the years was mainly due to a decrease in new samples processed and stored. On top of that, the increase in diagnostic services, which yielded a lower gross profit margin, also resulted in the decline in gross profit margin for Cordlife.

Cordlife’s share price last traded at S$0.385, with a market capitalization of S$98.29 million.

3) Ho Bee Land Limited (SGX: H13)

Ho Bee Land Limited (“Ho Bee Land”) was listed on the Mainboard of the Singapore Exchange in 1999. Headquartered in Singapore, Ho Bee Land has property investments and developments in Singapore, Australia, China, United Kingdom and Germany. The real estate development and investment company has a portfolio that covers a wide range of residential, commercial and high-tech industrial projects since its establishment in 1987.

For the past few financial years, Ho Bee Land’s gross profit margin has risen steadily, from 84.68% in FY2018 to 91.82% in FY2020.

The sky-high gross profit margin can be attributed to the company’s revenue stream pivoting towards rental income, which usually incurs a lower cost of sales as compared to development and sales of residential units.

Ho Bee Land’s share price last traded at S$2.80, with a market capitalization of S$1.85 billion.

4) Jumbo Group Limited (SGX: 42R)

Jumbo Group Limited (“Jumbo”) is one of Singapore’s leading multi-dining concept F&B establishments. It has a portfolio of 7 F&B brands - JUMBO Seafood, HACK IT, NG AH SIO Bak Kut Teh, Zui Teochew Cuisine, Chao Ting Pao Fan, Kok Kee Wonton Noodle and XINYAO Hainanese Chicken Rice, operates 4 Tsui Wah Hong Kong style “Cha Chaan Teng” outlets as a franchisee in Singapore and co-owns the Singapore Seafood Republic brand which has three outlets, operated under the franchise model in Japan.

Jumbo’s gross profit margin has been fluctuating at a tight range of between 62.31% and 63.75% for the past few financial years.

This is mainly due to Jumbo’s cost of sales, which comprises of raw materials and consumables, moves closely with the overall revenue. A higher revenue will result in a higher cost of sales for Jumbo, while a lower revenue will see its cost of sales decrease roughly by the same percentage.

Jumbo’s share price last traded at S$0.29, with a market capitalization of S$186.27 million.

5) TalkMed Group Limited (SGX: 5G3)

TalkMed Group Limited (“TalkMed”) is a Singapore-based investment holding company. The Company's principal activities are the provision of medical oncology services and stem cell transplant services.

The Company's segments include Oncology services and Stem cells services. Its doctors provide tertiary healthcare services in the fields of medical oncology, stem cell transplant and palliative care to the oncology patients in the private sector in Singapore through Parkway Cancer Centre (“PCC”).

After experiencing a stable gross profit margin for FY2018 and FY2019, TalkMed’s gross profit margin saw a decline to just 60.77% in FY2020. The lower margin was mainly due to the lower revenue recorded in FY2020.

TalkMed’s share price last traded at S$0.41, with a market capitalization of S$541.24 million.

Conclusion

All in all, gross profit margin shows the amount of profit made before deducting selling, general, and administrative costs.

A high gross profit margin over time shows that the company can make a reasonable profit on its sales, as long as they can keep its overhead costs in control, while a lower gross profit margin will increase the chances that the company might slip into a loss.

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