1099.HK WACC - Weighted Average Cost of Capital

The WACC of Sinopharm Group Co Ltd (1099.HK) is 7.4%.

The Cost of Equity of Sinopharm Group Co Ltd (1099.HK) is 12.55%.

The Cost of Debt of Sinopharm Group Co Ltd (1099.HK) is 4.90%.

	Range	Selected
Cost of equity	10.50% - 14.60%	12.55%
Tax rate	22.90% - 23.10%	23.00%
Cost of debt	4.10% - 5.70%	4.90%
WACC	6.2% - 8.6%	7.4%

WACC

1099.HK WACC calculation

Category	Low	High

Long-term bond rate	2.9%	3.4%
Equity market risk premium	6.0%	7.0%
Adjusted beta	1.28	1.54

Additional risk adjustments	0.0%	0.5%
Cost of equity	10.50%	14.60%

Tax rate	22.90%	23.10%
Debt/Equity ratio	1.42	1.42
Cost of debt	4.10%	5.70%

After-tax WACC	6.2%	8.6%


Selected WACC	7.4%

1099.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 1099.HK:

cost_of_equity (12.55%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (1.28) + 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.