1070.HK WACC - Weighted Average Cost of Capital
The WACC of TCL Electronics Holdings Ltd (1070.HK) is 8.9%.
| Range | Selected | |
| Cost of equity | 6.8% - 10.4% | 8.6% |
| Tax rate | 20.5% - 27.1% | 23.8% |
| Cost of debt | 4.3% - 23.5% | 13.9% |
| WACC | 6.2% - 11.6% | 8.9% |
| Category | Low | High |
| Long-term bond rate | 2.9% | 3.4% |
| Equity market risk premium | 6.0% | 7.0% |
| Adjusted beta | 0.66 | 0.93 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 6.8% | 10.4% |
| Tax rate | 20.5% | 27.1% |
| Debt/Equity ratio | 0.23 | 0.23 |
| Cost of debt | 4.3% | 23.5% |
| After-tax WACC | 6.2% | 11.6% |
| Selected WACC | 8.9% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| 1070.HK | TCL Electronics Holdings Ltd | 0.23 | 0.75 | 0.64 |
| 000016.SZ | Konka Group Co Ltd | 2.5 | 1.01 | 0.35 |
| 000100.SZ | TCL Technology Group Corp | 2.27 | 1.08 | 0.41 |
| 002429.SZ | Shenzhen MTC Co Ltd | 0.35 | 1.42 | 1.13 |
| 1478.HK | Q Technology (Group) Co Ltd | 0.34 | 1.24 | 0.99 |
| 300083.SZ | Guangdong Create Century Intelligent Equipment Group Corp Ltd | 0.2 | 1.46 | 1.27 |
| 600060.SS | Hisense Visual Technology Co Ltd | 0.2 | 1.11 | 0.97 |
| 600234.SS | Guanghe Landscape Culture Communication Co Ltd Shanxi | 0 | 0.43 | 0.43 |
| 751.HK | Skyworth Group Ltd | 2.61 | 0.79 | 0.27 |
| 8147.HK | Millennium Pacific Group Holdings Ltd | 0.31 | -0.08 | -0.06 |
| Low | High | |
| Unlevered beta | 0.42 | 0.77 |
| Relevered beta | 0.49 | 0.9 |
| Adjusted relevered beta | 0.66 | 0.93 |
1070.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 1070.HK:
cost_of_equity (8.60%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (0.66) + 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.