COGS In China

Higher COGS In China Compared To The Rest Of The World

We have combined the financial statements of China-listed non-financial companies into one for the past 23 years. The average number of companies included in this study was 1,981 per year and as of 2017, it was 2,777.

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Q2 hedge fund letters, conference, scoops etc

China’s gross profit margin has been 4 ppts below the global average

COGS In China

  • The gross profit margin has averaged 23.9% in China compared to the global average of 28.4%
  • Gross profit margin in China has varied between 15.1% and 23.9%

China’s net profit margin has been on par with the global average

COGS In China

  • The net profit margin has averaged 4.9% versus the global average of 5.1%
  • Net profit margin in China has varied between 3.9% and 10.1%
  • Even though China’s gross profit margin is lower, the net profit margin is about the same as the global average
  • Implying that China has higher COGS but lower SG&A and other costs than firms globally

Asset turnover in China has been slightly lower compared to the global average

COGS In China

  • In China, the sales-to-asset ratio of the average company has been 75% and has fallen from a high of 90% to a low of 55%
  • Globally, the asset turnover ratio has averaged 78% over the same time period

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