002046.SZ WACC - Weighted Average Cost of Capital
The WACC of Sinomach Precision Industry Co Ltd (002046.SZ) is 9.2%.
| Range | Selected | |
| Cost of equity | 8.8% - 11.4% | 10.1% |
| Tax rate | 12.3% - 14.7% | 13.5% |
| Cost of debt | 5.0% - 5.0% | 5% |
| WACC | 8.1% - 10.3% | 9.2% |
| Category | Low | High |
| Long-term bond rate | 2.7% | 3.2% |
| Equity market risk premium | 6.1% | 7.1% |
| Adjusted beta | 1 | 1.08 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 8.8% | 11.4% |
| Tax rate | 12.3% | 14.7% |
| Debt/Equity ratio | 0.17 | 0.17 |
| Cost of debt | 5.0% | 5.0% |
| After-tax WACC | 8.1% | 10.3% |
| Selected WACC | 9.2% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| 002046.SZ | Sinomach Precision Industry Co Ltd | 0.17 | 1.36 | 1.18 |
| 000821.SZ | J.S. Corrugating Machinery Co Ltd | 0.44 | 1.25 | 0.91 |
| 002026.SZ | Shandong Weida Machinery Co Ltd | 0.14 | 1.24 | 1.11 |
| 002255.SZ | Suzhou Hailu Heavy Industry Co Ltd | 0.03 | 1.02 | 0.99 |
| 002483.SZ | Jiangsu Rainbow Heavy Industries Co Ltd | 0.29 | 1.07 | 0.86 |
| 002520.SZ | ZheJiang RIFA Precision Machinery Co Ltd | 0.31 | 1.49 | 1.17 |
| 1651.HK | Precision Tsugami (China) Corporation Ltd | 0 | 0.57 | 0.57 |
| 300021.SZ | Dayu Water-saving Group Co Ltd | 0.72 | 1.22 | 0.75 |
| 603112.SS | Shanxi Huaxiang Group Co Ltd | 0.19 | 0.42 | 0.36 |
| 603901.SS | Hangzhou Youngsun Intelligent Equipment Co Ltd | 0.48 | 1.37 | 0.96 |
| Low | High | |
| Unlevered beta | 0.89 | 0.97 |
| Relevered beta | 1 | 1.12 |
| Adjusted relevered beta | 1 | 1.08 |
002046.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 002046.SZ:
cost_of_equity (10.10%) = risk_free_rate (2.95%) + equity_risk_premium (6.60%) * adjusted_beta (1) + 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.