1165.HK WACC - Weighted Average Cost of Capital

The WACC of Shunfeng International Clean Energy Ltd (1165.HK) is 6.9%.

The Cost of Equity of Shunfeng International Clean Energy Ltd (1165.HK) is 85.05%.

The Cost of Debt of Shunfeng International Clean Energy Ltd (1165.HK) is 5.50%.

	Range	Selected
Cost of equity	59.20% - 110.90%	85.05%
Tax rate	0.90% - 1.30%	1.10%
Cost of debt	4.00% - 7.00%	5.50%
WACC	5.0% - 8.8%	6.9%

WACC

1165.HK WACC calculation

Category	Low	High

Long-term bond rate	2.9%	3.4%
Equity market risk premium	6.0%	7.0%
Adjusted beta	9.43	15.33

Additional risk adjustments	0.0%	0.5%
Cost of equity	59.20%	110.90%

Tax rate	0.90%	1.30%
Debt/Equity ratio	52.93	52.93
Cost of debt	4.00%	7.00%

After-tax WACC	5.0%	8.8%


Selected WACC	6.9%

1165.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 1165.HK:

cost_of_equity (85.05%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (9.43) + 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.