1044.HK WACC - Weighted Average Cost of Capital

The WACC of Hengan International Group Company Ltd (1044.HK) is 9.6%.

The Cost of Equity of Hengan International Group Company Ltd (1044.HK) is 13.00%.

The Cost of Debt of Hengan International Group Company Ltd (1044.HK) is 4.25%.

	Range	Selected
Cost of equity	11.10% - 14.90%	13.00%
Tax rate	22.70% - 23.20%	22.95%
Cost of debt	4.00% - 4.50%	4.25%
WACC	8.3% - 10.9%	9.6%

WACC

1044.HK WACC calculation

Category	Low	High

Long-term bond rate	2.9%	3.4%
Equity market risk premium	6.0%	7.0%
Adjusted beta	1.37	1.58

Additional risk adjustments	0.0%	0.5%
Cost of equity	11.10%	14.90%

Tax rate	22.70%	23.20%
Debt/Equity ratio	0.54	0.54
Cost of debt	4.00%	4.50%

After-tax WACC	8.3%	10.9%


Selected WACC	9.6%

1044.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 1044.HK:

cost_of_equity (13.00%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (1.37) + 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.