1148.HK WACC - Weighted Average Cost of Capital

The WACC of Xinchen China Power Holdings Ltd (1148.HK) is 5.5%.

The Cost of Equity of Xinchen China Power Holdings Ltd (1148.HK) is 7.00%.

The Cost of Debt of Xinchen China Power Holdings Ltd (1148.HK) is 5.40%.

	Range	Selected
Cost of equity	5.60% - 8.40%	7.00%
Tax rate	3.50% - 6.70%	5.10%
Cost of debt	4.30% - 6.50%	5.40%
WACC	4.4% - 6.5%	5.5%

WACC

1148.HK WACC calculation

Category	Low	High

Long-term bond rate	2.9%	3.4%
Equity market risk premium	6.0%	7.0%
Adjusted beta	0.45	0.65

Additional risk adjustments	0.0%	0.5%
Cost of equity	5.60%	8.40%

Tax rate	3.50%	6.70%
Debt/Equity ratio	4.21	4.21
Cost of debt	4.30%	6.50%

After-tax WACC	4.4%	6.5%


Selected WACC	5.5%

1148.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 1148.HK:

cost_of_equity (7.00%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (0.45) + 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.