Gross margins for small kitchen appliances are normally higher than traditional home appliances ... they could command Gross Margin as high as 30%. Unlike Whirlpool, Maytag or B&D, Deer buy resin and creates its own molds thus improving its overall cost and margin.
Another thing to consider is their overall lower SG&A costs.. This could be mainly due to cheaper lease/land costs, people cost, less marketing expense (they must be obviously spending less than Sony or Whirlpool as % of sales).
Also note, the last 2 years their local China sales have increased and thus they are avoiding the US companies who normally negotiate lower prices from Chinese companies.
Also note salary of their top executives are only $24K to $50K compared to millions minted by Whirlpoo or B&D….. Most Americans make more than their management team :-)
Also they use a smaller CPA firm called "Goldman Kurland & Mohidin" instead of using a money minting accounting firm like PwC, KPMG, etc .
In any case, I know 20% in Operating Margin seems high for the industry but I believe they are running the operation well and I will give the benefit of the doubt to them instead of a short loving analyst.....
Advice to the management team is to hire more branded accounting firm even though I personally believe smaller accounting firms do a better job …also hire a very good legal company … all this will reduce margin slightly may be 1% at most …