002863.SZ WACC - Weighted Average Cost of Capital
The WACC of Zhejiang Jinfei Kaida Wheel Co Ltd (002863.SZ) is 8.9%.
| Range | Selected | |
| Cost of equity | 12.5% - 16.3% | 14.4% |
| Tax rate | 3.4% - 11.3% | 7.35% |
| Cost of debt | 5.0% - 5.0% | 5% |
| WACC | 8.2% - 9.6% | 8.9% |
| Category | Low | High |
| Long-term bond rate | 2.7% | 3.2% |
| Equity market risk premium | 6.1% | 7.1% |
| Adjusted beta | 1.61 | 1.77 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 12.5% | 16.3% |
| Tax rate | 3.4% | 11.3% |
| Debt/Equity ratio | 1.3 | 1.3 |
| Cost of debt | 5.0% | 5.0% |
| After-tax WACC | 8.2% | 9.6% |
| Selected WACC | 8.9% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| 002863.SZ | Zhejiang Jinfei Kaida Wheel Co Ltd | 1.35 | 1.29 | 0.57 |
| 002284.SZ | Zhejiang Asia-Pacific Mechanical & Electronic Co Ltd | 0.27 | 1.43 | 1.14 |
| 002328.SZ | Shanghai Xinpeng Industry Co Ltd | 0.16 | 1.14 | 0.99 |
| 002454.SZ | Songz Automobile Air Conditioning Co Ltd | 0.31 | 1.22 | 0.94 |
| 002536.SZ | Feilong Auto Components Co Ltd | 0.12 | 0.78 | 0.7 |
| 002590.SZ | Zhejiang VIE Science & Technology Co Ltd | 0.15 | 1.65 | 1.44 |
| 002593.SZ | Xiamen Sunrise Group Co Ltd | 0.48 | 1.68 | 1.15 |
| 002664.SZ | Changying Xinzhi Technology Co Ltd | 0.69 | 1.31 | 0.79 |
| 603197.SS | Shanghai Baolong Automotive Corp | 0.6 | 1.27 | 0.81 |
| 6830.HK | Huazhong In Vehicle Holdings Co Ltd | 1.62 | 0.9 | 0.36 |
| Low | High | |
| Unlevered beta | 0.8 | 0.96 |
| Relevered beta | 1.91 | 2.15 |
| Adjusted relevered beta | 1.61 | 1.77 |
002863.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 002863.SZ:
cost_of_equity (14.40%) = risk_free_rate (2.95%) + equity_risk_premium (6.60%) * adjusted_beta (1.61) + 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.