000999.SZ WACC - Weighted Average Cost of Capital
The WACC of China Resources Sanjiu Medical & Pharmaceutical Co Ltd (000999.SZ) is 9.1%.
| Range | Selected | |
| Cost of equity | 8.0% - 10.6% | 9.3% |
| Tax rate | 15.6% - 16.5% | 16.05% |
| Cost of debt | 5.0% - 5.0% | 5% |
| WACC | 7.8% - 10.4% | 9.1% |
| Category | Low | High |
| Long-term bond rate | 2.7% | 3.2% |
| Equity market risk premium | 6.1% | 7.1% |
| Adjusted beta | 0.87 | 0.97 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 8.0% | 10.6% |
| Tax rate | 15.6% | 16.5% |
| Debt/Equity ratio | 0.04 | 0.04 |
| Cost of debt | 5.0% | 5.0% |
| After-tax WACC | 7.8% | 10.4% |
| Selected WACC | 9.1% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| 000999.SZ | China Resources Sanjiu Medical & Pharmaceutical Co Ltd | 0.04 | 1.03 | 1 |
| 000513.SZ | Livzon Pharmaceutical Group Inc | 0.15 | 0.62 | 0.55 |
| 002422.SZ | Sichuan Kelun Pharmaceutical Co Ltd | 0.08 | 0.77 | 0.72 |
| 600085.SS | Beijing Tongrentang Co Ltd | 0.1 | 1.37 | 1.26 |
| 600267.SS | Zhejiang Hisun Pharmaceutical Co Ltd | 0.43 | 1.01 | 0.74 |
| 600380.SS | Joincare Pharmaceutical Group Industry Co Ltd | 0.34 | 1.13 | 0.88 |
| 600420.SS | Shanghai Shyndec Pharmaceutical Co Ltd | 0.13 | 1.39 | 1.25 |
| 600518.SS | Kangmei Pharmaceutical Co Ltd | 0.04 | 1.38 | 1.33 |
| 600812.SS | North China Pharmaceutical Co Ltd | 1.16 | 1.24 | 0.63 |
| 603858.SS | Shandong Buchang Pharmaceuticals Co Ltd | 0.22 | 0.93 | 0.78 |
| Low | High | |
| Unlevered beta | 0.77 | 0.93 |
| Relevered beta | 0.81 | 0.96 |
| Adjusted relevered beta | 0.87 | 0.97 |
000999.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 000999.SZ:
cost_of_equity (9.30%) = risk_free_rate (2.95%) + equity_risk_premium (6.60%) * adjusted_beta (0.87) + 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.