002324.SZ WACC - Weighted Average Cost of Capital
The WACC of Shanghai Pret Composites Co Ltd (002324.SZ) is 9.6%.
| Range | Selected | |
| Cost of equity | 10.2% - 13.6% | 11.9% |
| Tax rate | 10.5% - 22.5% | 16.5% |
| Cost of debt | 5.0% - 5.0% | 5% |
| WACC | 8.5% - 10.6% | 9.6% |
| Category | Low | High |
| Long-term bond rate | 2.7% | 3.2% |
| Equity market risk premium | 6.1% | 7.1% |
| Adjusted beta | 1.23 | 1.39 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 10.2% | 13.6% |
| Tax rate | 10.5% | 22.5% |
| Debt/Equity ratio | 0.43 | 0.43 |
| Cost of debt | 5.0% | 5.0% |
| After-tax WACC | 8.5% | 10.6% |
| Selected WACC | 9.6% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| 002324.SZ | Shanghai Pret Composites Co Ltd | 0.43 | 1.45 | 1.05 |
| 002407.SZ | Do-Fluoride Chemicals Co Ltd | 0.66 | 1.37 | 0.88 |
| 300132.SZ | Fujian Green Pine Co Ltd | 0.18 | 1.4 | 1.21 |
| 300180.SZ | Huafon Microfibre Shanghai Co Ltd | 0.11 | 1.82 | 1.66 |
| 300821.SZ | Shandong Dongyue Organosilicon Materials Co Ltd | 0.1 | 1.46 | 1.35 |
| 600075.SS | Xinjiang Tianye Co Ltd | 1 | 0.96 | 0.52 |
| 600273.SS | Zhejiang Jiahua Energy Chemical Industry Co Ltd | 0.09 | 0.64 | 0.59 |
| 603010.SS | Zhejiang Wansheng Co Ltd | 0.31 | 0.81 | 0.64 |
| 603026.SS | Shandong Shida Shenghua Chemical Group Co Ltd | 0.53 | 1.61 | 1.11 |
| 603379.SS | Zhejiang Sanmei Chemical Industry Co Ltd | 0 | 1.31 | 1.3 |
| Low | High | |
| Unlevered beta | 0.98 | 1.15 |
| Relevered beta | 1.34 | 1.58 |
| Adjusted relevered beta | 1.23 | 1.39 |
002324.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 002324.SZ:
cost_of_equity (11.90%) = risk_free_rate (2.95%) + equity_risk_premium (6.60%) * adjusted_beta (1.23) + 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.