002865.SZ WACC - Weighted Average Cost of Capital
The WACC of Hainan Drinda Automotive Trim Co Ltd (002865.SZ) is 9.2%.
| Range | Selected | |
| Cost of equity | 10.9% - 13.8% | 12.35% |
| Tax rate | 10.5% - 14.4% | 12.45% |
| Cost of debt | 5.0% - 5.0% | 5% |
| WACC | 8.4% - 10.1% | 9.2% |
| Category | Low | High |
| Long-term bond rate | 2.7% | 3.2% |
| Equity market risk premium | 6.1% | 7.1% |
| Adjusted beta | 1.34 | 1.42 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 10.9% | 13.8% |
| Tax rate | 10.5% | 14.4% |
| Debt/Equity ratio | 0.64 | 0.64 |
| Cost of debt | 5.0% | 5.0% |
| After-tax WACC | 8.4% | 10.1% |
| Selected WACC | 9.2% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| 002865.SZ | Hainan Drinda Automotive Trim Co Ltd | 0.64 | 1.54 | 0.98 |
| 002265.SZ | Yunnan Xiyi Industrial Co Ltd | 0.08 | 0.91 | 0.85 |
| 003033.SZ | Qingdao CHOHO Industrial Co Ltd | 0.14 | 0.75 | 0.66 |
| 300421.SZ | Jiangsu LiXing General Steel Ball Co Ltd | 0.07 | 1.33 | 1.26 |
| 600148.SS | Changchun Yidong Clutch Co Ltd | 0.09 | 0.52 | 0.48 |
| 603121.SS | Shanghai Sinotec Co Ltd | 0.07 | 1.21 | 1.14 |
| 603335.SS | Guangdong Dcenti Auto-Parts Stock Ltd Co | 0.42 | 1.3 | 0.94 |
| 603788.SS | Ningbo Gaofa Automotive Control System Co Ltd | 0.04 | 1.12 | 1.08 |
| 603922.SS | Suzhou Jin Hong Shun Auto Parts Co Ltd | 0.12 | 1.14 | 1.03 |
| 605128.SS | Shanghai Yanpu Metal Products Co Ltd | 0.08 | 1.12 | 1.04 |
| Low | High | |
| Unlevered beta | 0.97 | 1.04 |
| Relevered beta | 1.51 | 1.63 |
| Adjusted relevered beta | 1.34 | 1.42 |
002865.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 002865.SZ:
cost_of_equity (12.35%) = risk_free_rate (2.95%) + equity_risk_premium (6.60%) * adjusted_beta (1.34) + 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.