000428.SZ WACC - Weighted Average Cost of Capital
The WACC of Huatian Hotel Group Co Ltd (000428.SZ) is 7.1%.
| Range | Selected | |
| Cost of equity | 6.7% - 11.9% | 9.3% |
| Tax rate | 2.2% - 7.7% | 4.95% |
| Cost of debt | 5.0% - 5.0% | 5% |
| WACC | 5.8% - 8.4% | 7.1% |
| Category | Low | High |
| Long-term bond rate | 2.7% | 3.2% |
| Equity market risk premium | 6.1% | 7.1% |
| Adjusted beta | 0.66 | 1.16 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 6.7% | 11.9% |
| Tax rate | 2.2% | 7.7% |
| Debt/Equity ratio | 0.95 | 0.95 |
| Cost of debt | 5.0% | 5.0% |
| After-tax WACC | 5.8% | 8.4% |
| Selected WACC | 7.1% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| 000428.SZ | Huatian Hotel Group Co Ltd | 0.95 | 1.23 | 0.64 |
| 000524.SZ | Guangzhou Lingnan Group Holdings Co Ltd | 0.01 | 1.03 | 1.02 |
| 1158.HK | Zhejiang New Century Hotel Management Co Ltd | 0.52 | 0.95 | 0.63 |
| 1383.HK | Suncity Group Holdings Ltd | 7.98 | 0.73 | 0.08 |
| 2707.TW | Formosa International Hotels Corp | 0.14 | 0.18 | 0.16 |
| 601007.SS | Jinling Hotel Corp Ltd | 0.18 | 1.04 | 0.89 |
| 603199.SS | Anhui Jiuhuashan Tourism Development Co Ltd | 0 | 0.88 | 0.88 |
| 8308.HK | Gudou Holdings Ltd | 2.09 | 0.97 | 0.32 |
| H07.SI | Stamford Land Corporation Ltd | 0.1 | 0.03 | 0.03 |
| INPP.JK | Indonesian Paradise Property Tbk PT | 0.2 | -0.28 | -0.23 |
| Low | High | |
| Unlevered beta | 0.26 | 0.63 |
| Relevered beta | 0.49 | 1.24 |
| Adjusted relevered beta | 0.66 | 1.16 |
000428.SZ's CAPM model and how its cost of Equity is calculated
The Cost of Equity reflects the return a company needs to deliver to shareholders to justify the risk of investing in its shares. It’s computed using the Capital Asset Pricing Model (CAPM), which blends the risk-free rate, the stock’s beta, and the market risk premium.
This method evaluates the stock’s risk compared to a safe investment and the market’s overall volatility.
Here’s how we figure out the cost of equity for 000428.SZ:
cost_of_equity (9.30%) = risk_free_rate (2.95%) + equity_risk_premium (6.60%) * adjusted_beta (0.66) + risk_adjustments (0.25%)
We include the risk adjustments, which range from 0% to 1%, to keep our WACC conservatives, especially for companies traded in developing markets.