1011.HK WACC - Weighted Average Cost of Capital

The WACC of China NT Pharma Group Company Ltd (1011.HK) is 7.3%.

The Cost of Equity of China NT Pharma Group Company Ltd (1011.HK) is 9.75%.

The Cost of Debt of China NT Pharma Group Company Ltd (1011.HK) is 5.50%.

	Range	Selected
Cost of equity	7.50% - 12.00%	9.75%
Tax rate	0.30% - 0.90%	0.60%
Cost of debt	4.00% - 7.00%	5.50%
WACC	5.5% - 9.1%	7.3%

WACC

1011.HK WACC calculation

Category	Low	High

Long-term bond rate	2.9%	3.4%
Equity market risk premium	6.0%	7.0%
Adjusted beta	0.78	1.16

Additional risk adjustments	0.0%	0.5%
Cost of equity	7.50%	12.00%

Tax rate	0.30%	0.90%
Debt/Equity ratio	1.37	1.37
Cost of debt	4.00%	7.00%

After-tax WACC	5.5%	9.1%


Selected WACC	7.3%

1011.HK'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 1011.HK:

cost_of_equity (9.75%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (0.78) + 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.