001965.SZ WACC - Weighted Average Cost of Capital
The WACC of China Merchants Expressway Network Technology Holdings Co Ltd (001965.SZ) is 5.9%.
| Range | Selected | |
| Cost of equity | 5.8% - 7.7% | 6.75% |
| Tax rate | 6.6% - 7.0% | 6.8% |
| Cost of debt | 5.0% - 5.0% | 5% |
| WACC | 5.3% - 6.4% | 5.9% |
| Category | Low | High |
| Long-term bond rate | 2.7% | 3.2% |
| Equity market risk premium | 6.1% | 7.1% |
| Adjusted beta | 0.52 | 0.56 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 5.8% | 7.7% |
| Tax rate | 6.6% | 7.0% |
| Debt/Equity ratio | 0.73 | 0.73 |
| Cost of debt | 5.0% | 5.0% |
| After-tax WACC | 5.3% | 6.4% |
| Selected WACC | 5.9% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| 001965.SZ | China Merchants Expressway Network Technology Holdings Co Ltd | 0.73 | 0.23 | 0.14 |
| 000429.SZ | Guangdong Provincial Expressway Development Co Ltd | 0.26 | 0.04 | 0.03 |
| 576.HK | Zhejiang Expressway Co Ltd | 1.98 | 0.68 | 0.24 |
| 600012.SS | Anhui Expressway Co Ltd | 0.29 | 0.31 | 0.25 |
| 600020.SS | Henan Zhongyuan Expressway Co Ltd | 2.98 | 0.7 | 0.18 |
| 600269.SS | Jiangxi Ganyue Expressway Co Ltd | 1.03 | 1.02 | 0.52 |
| 600350.SS | Shandong Hi-speed Co Ltd | 1.53 | 0.19 | 0.08 |
| 600377.SS | Jiangsu Expressway Co Ltd | 0.44 | 0.12 | 0.08 |
| 600548.SS | Shenzhen Expressway Co Ltd | 1.25 | 0.41 | 0.19 |
| 601107.SS | Sichuan Expressway Co Ltd | 2.05 | 0.65 | 0.22 |
| Low | High | |
| Unlevered beta | 0.17 | 0.2 |
| Relevered beta | 0.28 | 0.34 |
| Adjusted relevered beta | 0.52 | 0.56 |
001965.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 001965.SZ:
cost_of_equity (6.75%) = risk_free_rate (2.95%) + equity_risk_premium (6.60%) * adjusted_beta (0.52) + 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.