The WACC of Hainan Shuangcheng Pharmaceuticals Co Ltd (002693.SZ) is 9.0%.
Range | Selected | |
Cost of equity | 7.2% - 11.3% | 9.25% |
Tax rate | 1.3% - 1.4% | 1.35% |
Cost of debt | 5.0% - 5.0% | 5% |
WACC | 7.0% - 10.9% | 9.0% |
Category | Low | High |
Long-term bond rate | 2.7% | 3.2% |
Equity market risk premium | 6.1% | 7.1% |
Adjusted beta | 0.74 | 1.08 |
Additional risk adjustments | 0.0% | 0.5% |
Cost of equity | 7.2% | 11.3% |
Tax rate | 1.3% | 1.4% |
Debt/Equity ratio | 0.07 | 0.07 |
Cost of debt | 5.0% | 5.0% |
After-tax WACC | 7.0% | 10.9% |
Selected WACC | 9.0% | |
Debt/Equity | Unlevered | |||
Peers | Company Name | ratio | Beta | beta |
002693.SZ | Hainan Shuangcheng Pharmaceuticals Co Ltd | 0.07 | 2.61 | 2.44 |
000590.SZ | Tus Pharmaceutical Group Co Ltd | 0.08 | 1.08 | 1 |
002898.SZ | Zhuhai Sailong Pharmaceutical Co Ltd | 0.14 | 1.34 | 1.17 |
1652.HK | Fusen Pharmaceutical Co Ltd | 1.94 | -0.27 | -0.09 |
300534.SZ | Gansu Longshenrongfa Pharmaceutical Industry Co Ltd | 0.05 | 1.24 | 1.18 |
600272.SS | Shanghai Kai Kai Industry Co Ltd | 0.05 | 0.45 | 0.43 |
600671.SS | Hangzhou TianMuShan Pharmaceutical Enterprise Co Ltd | 0.1 | 0.49 | 0.45 |
603139.SS | Shaanxi Kanghui Pharmaceutical Co Ltd | 0.32 | 0.85 | 0.65 |
603168.SS | Zhejiang Shapuaisi Pharmaceutical Co Ltd | 0.06 | 1.16 | 1.09 |
603963.SS | Dali Pharmaceutical Co Ltd | 0.09 | 1.44 | 1.32 |
8049.HK | Jilin Province Huinan Changlong Bio-pharmacy Co Ltd | 0 | 0.36 | 0.36 |
Low | High | |
Unlevered beta | 0.65 | 1.09 |
Relevered beta | 0.61 | 1.12 |
Adjusted relevered beta | 0.74 | 1.08 |
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 002693.SZ:
cost_of_equity (9.25%) = risk_free_rate (2.95%) + equity_risk_premium (6.60%) * adjusted_beta (0.74) + 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.