002218.SZ WACC - Weighted Average Cost of Capital
The WACC of Shenzhen Topraysolar Co Ltd (002218.SZ) is 9.1%.
| Range | Selected | |
| Cost of equity | 9.6% - 13.1% | 11.35% |
| Tax rate | 13.4% - 15.7% | 14.55% |
| Cost of debt | 5.0% - 5.0% | 5% |
| WACC | 7.9% - 10.3% | 9.1% |
| Category | Low | High |
| Long-term bond rate | 2.7% | 3.2% |
| Equity market risk premium | 6.1% | 7.1% |
| Adjusted beta | 1.13 | 1.32 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 9.6% | 13.1% |
| Tax rate | 13.4% | 15.7% |
| Debt/Equity ratio | 0.47 | 0.47 |
| Cost of debt | 5.0% | 5.0% |
| After-tax WACC | 7.9% | 10.3% |
| Selected WACC | 9.1% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| 002218.SZ | Shenzhen Topraysolar Co Ltd | 0.47 | 1.04 | 0.74 |
| 1385.HK | Shanghai Fudan Microelectronics Group Co Ltd | 0 | 0.74 | 0.74 |
| 300053.SZ | Zhuhai Orbita Aerospace Science & Technology Co Ltd | 0.02 | 1.79 | 1.75 |
| 300102.SZ | Xiamen Changelight Co Ltd | 0.17 | 1.4 | 1.22 |
| 300301.SZ | Shenzhen Changfang Group Co Ltd | 0.22 | 0.98 | 0.82 |
| 300671.SZ | Shenzhen Fine Made Electronics Group Co Ltd | 0.11 | 1.63 | 1.48 |
| 300708.SZ | Focus Lightings Tech Co Ltd | 0.17 | 1.09 | 0.95 |
| 600360.SS | JiLin Sino Microelectronics Co Ltd | 0.27 | 1.07 | 0.87 |
| 603421.SS | Qingdao Topscomm Communication Inc | 0.18 | 0.82 | 0.71 |
| 688123.SS | Giantec Semiconductor Corp | 0 | 1.59 | 1.59 |
| Low | High | |
| Unlevered beta | 0.85 | 1.06 |
| Relevered beta | 1.19 | 1.48 |
| Adjusted relevered beta | 1.13 | 1.32 |
002218.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 002218.SZ:
cost_of_equity (11.35%) = risk_free_rate (2.95%) + equity_risk_premium (6.60%) * adjusted_beta (1.13) + 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.