002616.SZ WACC - Weighted Average Cost of Capital
The WACC of Guangdong Chant Group Inc (002616.SZ) is 6.9%.
| Range | Selected | |
| Cost of equity | 9.3% - 14.0% | 11.65% |
| Tax rate | 26.8% - 28.9% | 27.85% |
| Cost of debt | 5.0% - 5.0% | 5% |
| WACC | 5.9% - 7.8% | 6.9% |
| Category | Low | High |
| Long-term bond rate | 2.7% | 3.2% |
| Equity market risk premium | 6.1% | 7.1% |
| Adjusted beta | 1.09 | 1.45 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 9.3% | 14.0% |
| Tax rate | 26.8% | 28.9% |
| Debt/Equity ratio | 1.47 | 1.47 |
| Cost of debt | 5.0% | 5.0% |
| After-tax WACC | 5.9% | 7.8% |
| Selected WACC | 6.9% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| 002616.SZ | Guangdong Chant Group Inc | 1.47 | 1.05 | 0.51 |
| 002005.SZ | Elec-Tech International Co Ltd | 0.18 | 0.26 | 0.23 |
| 002150.SZ | Jiangsu Tongrun Equipment Technology Co Ltd | 0.39 | 0.73 | 0.57 |
| 002420.SZ | Guangzhou Echom Sci & Tech Co Ltd | 0.38 | 1.15 | 0.9 |
| 1626.TW | Airmate Cayman International Co Ltd | 0.44 | 0.61 | 0.46 |
| 200512.SZ | Tsann Kuen China Enterprise Co Ltd | 0.72 | 0.51 | 0.33 |
| 300217.SZ | Zhenjiang Dongfang Electric Heating Technology Co Ltd | 0.09 | 1.87 | 1.75 |
| 300249.SZ | Yimikang Tech Group Co Ltd | 0.08 | 1.62 | 1.53 |
| 300879.SZ | Ningbo Daye Garden Machinery Co Ltd | 0.19 | 1.24 | 1.09 |
| 603551.SS | AUPU Home Style Corp Ltd | 0.06 | 0.79 | 0.75 |
| Low | High | |
| Unlevered beta | 0.55 | 0.81 |
| Relevered beta | 1.13 | 1.67 |
| Adjusted relevered beta | 1.09 | 1.45 |
002616.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 002616.SZ:
cost_of_equity (11.65%) = risk_free_rate (2.95%) + equity_risk_premium (6.60%) * adjusted_beta (1.09) + 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.