1058.HK WACC - Weighted Average Cost of Capital
The WACC of Guangdong Tannery Ltd (1058.HK) is 16.2%.
| Range | Selected | |
| Cost of equity | 5.5% - 7.5% | 6.5% |
| Tax rate | 0.8% - 1.1% | 0.95% |
| Cost of debt | 7.0% - 358.5% | 182.75% |
| WACC | 5.6% - 26.8% | 16.2% |
| Category | Low | High |
| Long-term bond rate | 2.9% | 3.4% |
| Equity market risk premium | 6.0% | 7.0% |
| Adjusted beta | 0.36 | 0.45 |
| Additional risk adjustments | 0.5% | 1.0% |
| Cost of equity | 5.5% | 7.5% |
| Tax rate | 0.8% | 1.1% |
| Debt/Equity ratio | 0.06 | 0.06 |
| Cost of debt | 7.0% | 358.5% |
| After-tax WACC | 5.6% | 26.8% |
| Selected WACC | 16.2% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| 1058.HK | Guangdong Tannery Ltd | 0.06 | 0.72 | 0.68 |
| 1025.HK | KNT Holdings Ltd | 0.45 | 0.6 | 0.42 |
| 1520.HK | CEFC Hong Kong Financial Investment Company Ltd | 0.06 | -0.42 | -0.4 |
| 1825.HK | Sterling Group Holdings Ltd | 7.11 | 0.07 | 0.01 |
| 2011.HK | China Apex Group Ltd | 0.1 | 0.01 | 0.01 |
| 442.HK | Hifood Group Holdings Co Ltd | 0.01 | 0.05 | 0.05 |
| 475.HK | Central Development Holdings Ltd | 0.86 | -0.42 | -0.23 |
| 8219.HK | Hanvey Group Holdings Ltd | 2.09 | 1.69 | 0.55 |
| 8285.HK | Sling Group Holdings Ltd | 2.29 | 0.38 | 0.12 |
| 8456.HK | Mansion International Holdings Ltd | 1.22 | 0.53 | 0.24 |
| Low | High | |
| Unlevered beta | 0.04 | 0.17 |
| Relevered beta | 0.04 | 0.18 |
| Adjusted relevered beta | 0.36 | 0.45 |
1058.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 1058.HK:
cost_of_equity (6.50%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (0.36) + risk_adjustments (0.75%)
We include the risk adjustments, which range from 0% to 1%, to keep our WACC conservatives, especially for companies traded in developing markets.