000518.SZ WACC - Weighted Average Cost of Capital
The WACC of Jiangsu Sihuan Bioengineering Co Ltd (000518.SZ) is 10.5%.
| Range | Selected | |
| Cost of equity | 8.7% - 12.6% | 10.65% |
| Tax rate | 1.0% - 3.2% | 2.1% |
| Cost of debt | 5.0% - 5.0% | 5% |
| WACC | 8.6% - 12.4% | 10.5% |
| Category | Low | High |
| Long-term bond rate | 2.7% | 3.2% |
| Equity market risk premium | 6.1% | 7.1% |
| Adjusted beta | 0.98 | 1.25 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 8.7% | 12.6% |
| Tax rate | 1.0% | 3.2% |
| Debt/Equity ratio | 0.02 | 0.02 |
| Cost of debt | 5.0% | 5.0% |
| After-tax WACC | 8.6% | 12.4% |
| Selected WACC | 10.5% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| 000518.SZ | Jiangsu Sihuan Bioengineering Co Ltd | 0.02 | 1.58 | 1.56 |
| 1672.HK | Ascletis Pharma Inc | 0 | 1.1 | 1.1 |
| 300204.SZ | Staidson Beijing BioPharmaceuticals Co Ltd | 0.01 | 1.54 | 1.52 |
| 300238.SZ | Guanhao Biotech Co Ltd | 0.02 | 1.7 | 1.67 |
| 300294.SZ | Boya Bio-pharmaceutical Group Co Ltd | 0.02 | 0.75 | 0.74 |
| 300683.SZ | Wuhan Hiteck Biological Pharma Co Ltd | 0.01 | 1.46 | 1.44 |
| 603739.SS | Qingdao Vland Biotech INC | 0.21 | 1.55 | 1.28 |
| 688198.SS | Beijing Balance Medical Technology Co Ltd | 0 | 0.74 | 0.74 |
| 688278.SS | Xiamen Amoytop Biotech Co Ltd | 0 | 0.49 | 0.49 |
| 8247.HK | Biosino Bio-Technology and Science Inc | 1.89 | 0.59 | 0.21 |
| Low | High | |
| Unlevered beta | 0.95 | 1.35 |
| Relevered beta | 0.97 | 1.37 |
| Adjusted relevered beta | 0.98 | 1.25 |
000518.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 000518.SZ:
cost_of_equity (10.65%) = risk_free_rate (2.95%) + equity_risk_premium (6.60%) * adjusted_beta (0.98) + 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.