000852.SZ WACC - Weighted Average Cost of Capital
The WACC of Sinopec Oilfield Equipment Corp (000852.SZ) is 7.2%.
| Range | Selected | |
| Cost of equity | 7.2% - 9.8% | 8.5% |
| Tax rate | 7.4% - 10.2% | 8.8% |
| Cost of debt | 5.0% - 5.0% | 5% |
| WACC | 6.4% - 8.1% | 7.2% |
| Category | Low | High |
| Long-term bond rate | 2.7% | 3.2% |
| Equity market risk premium | 6.1% | 7.1% |
| Adjusted beta | 0.73 | 0.86 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 7.2% | 9.8% |
| Tax rate | 7.4% | 10.2% |
| Debt/Equity ratio | 0.46 | 0.46 |
| Cost of debt | 5.0% | 5.0% |
| After-tax WACC | 6.4% | 8.1% |
| Selected WACC | 7.2% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| 000852.SZ | Sinopec Oilfield Equipment Corp | 0.46 | 0.62 | 0.44 |
| 002108.SZ | Cangzhou Mingzhu Plastic Co Ltd | 0.24 | 1.08 | 0.88 |
| 002443.SZ | Zhejiang Kingland Pipeline and Technologies Co Ltd | 0.04 | 0.75 | 0.73 |
| 002490.SZ | Shandong Molong Petroleum Machinery Co Ltd | 0.44 | 0.88 | 0.63 |
| 1623.HK | Hilong Holding Ltd | 15.34 | 0.62 | 0.04 |
| 1921.HK | Dalipal Holdings Ltd | 0.23 | 0.16 | 0.14 |
| 1938.HK | Chu Kong Petroleum and Natural Gas Steel Pipe Holdings Ltd | 10.28 | 0.36 | 0.03 |
| 196.HK | Honghua Group Ltd | 3.6 | 1.72 | 0.4 |
| 3303.HK | Jutal Offshore Oil Services Ltd | 0.08 | 0.55 | 0.52 |
| 603800.SS | Suzhou Douson Drilling&Production Equipment Co Ltd | 0.2 | 1.58 | 1.34 |
| Low | High | |
| Unlevered beta | 0.42 | 0.56 |
| Relevered beta | 0.6 | 0.79 |
| Adjusted relevered beta | 0.73 | 0.86 |
000852.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 000852.SZ:
cost_of_equity (8.50%) = risk_free_rate (2.95%) + equity_risk_premium (6.60%) * adjusted_beta (0.73) + 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.