Category	Low	High

Long-term bond rate	2.7%	3.2%
Equity market risk premium	6.1%	7.1%
Adjusted beta	0.69	0.89

Additional risk adjustments	0.0%	0.5%
Cost of equity	6.9%	10.0%

Tax rate	10.8%	13.2%
Debt/Equity ratio	0.31	0.31
Cost of debt	5.0%	5.0%

After-tax WACC	6.3%	8.7%


Selected WACC	7.5%

002047.SZ WACC - Detailed calculations of Beta

		Debt/Equity		Unlevered
Peers	Company Name	ratio	Beta	beta

002047.SZ	Shen Zhen Bauing Construction Holding Group Co Ltd	0.31	1.37	1.07
002116.SZ	China Haisum Engineering Co Ltd	0.01	0.88	0.87
002307.SZ	Xinjiang Beixin Road & Bridge Group Co Ltd	7.26	1.21	0.16
002941.SZ	Xinjiang Communications Construction Group Co Ltd	1.02	1.12	0.59
1459.HK	Jujiang Construction Group Co Ltd	2.85	0.44	0.13
2258.HK	Watts International Maritime Engineering Ltd	2.05	0.31	0.11
600248.SS	Shaanxi Construction Engineering Group Corp Ltd	4.9	0.82	0.15
600326.SS	Tibet Tianlu Co Ltd	0.45	1.08	0.77
600846.SS	Shanghai Tongji Science&Technology Industrial Co Ltd	0.45	1.01	0.72
601226.SS	HuaDian Heavy Industries Co Ltd	0.32	0.79	0.62

	Low	High

Unlevered beta	0.42	0.66
Relevered beta	0.54	0.84
Adjusted relevered beta	0.69	0.89

002047.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 002047.SZ:

cost_of_equity (8.45%) = risk_free_rate (2.95%) + equity_risk_premium (6.60%) * adjusted_beta (0.69) + 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.