002216.SZ WACC - Weighted Average Cost of Capital
The WACC of Sanquan Food Co Ltd (002216.SZ) is 9.7%.
| Range | Selected | |
| Cost of equity | 8.9% - 11.4% | 10.15% |
| Tax rate | 21.1% - 21.5% | 21.3% |
| Cost of debt | 5.0% - 5.0% | 5% |
| WACC | 8.5% - 10.9% | 9.7% |
| Category | Low | High |
| Long-term bond rate | 2.7% | 3.2% |
| Equity market risk premium | 6.1% | 7.1% |
| Adjusted beta | 1.01 | 1.09 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 8.9% | 11.4% |
| Tax rate | 21.1% | 21.5% |
| Debt/Equity ratio | 0.08 | 0.08 |
| Cost of debt | 5.0% | 5.0% |
| After-tax WACC | 8.5% | 10.9% |
| Selected WACC | 9.7% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| 002216.SZ | Sanquan Food Co Ltd | 0.08 | 1.49 | 1.4 |
| 002481.SZ | Yantai Shuangta Food Co Ltd | 0.12 | 1.19 | 1.09 |
| 002557.SZ | Chacha Food Co Ltd | 0.22 | 1.09 | 0.93 |
| 002582.SZ | Haoxiangni Health Food Co Ltd | 0.15 | 1.54 | 1.37 |
| 002946.SZ | New Hope Dairy Co Ltd | 0.2 | 0.83 | 0.72 |
| 1458.HK | Zhou Hei Ya International Holdings Company Ltd | 0.07 | 1.02 | 0.97 |
| 1717.HK | Ausnutria Dairy Corp Ltd | 0.72 | 0.73 | 0.46 |
| 300138.SZ | Chenguang Biotech Group Co Ltd | 0.93 | 1.33 | 0.77 |
| 600305.SS | Jiangsu Hengshun Vinegar-Industry Co Ltd | 0.01 | 1.06 | 1.06 |
| 603711.SS | Xiangpiaopiao Food Co Ltd | 0.13 | 1.6 | 1.45 |
| Low | High | |
| Unlevered beta | 0.95 | 1.07 |
| Relevered beta | 1.01 | 1.13 |
| Adjusted relevered beta | 1.01 | 1.09 |
002216.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 002216.SZ:
cost_of_equity (10.15%) = risk_free_rate (2.95%) + equity_risk_premium (6.60%) * adjusted_beta (1.01) + 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.