1177.HK WACC - Weighted Average Cost of Capital
The WACC of Sino Biopharmaceutical Ltd (1177.HK) is 7.6%.
| Range | Selected | |
| Cost of equity | 6.7% - 9.4% | 8.05% |
| Tax rate | 12.2% - 13.4% | 12.8% |
| Cost of debt | 4.0% - 4.5% | 4.25% |
| WACC | 6.4% - 8.9% | 7.6% |
| Category | Low | High |
| Long-term bond rate | 2.9% | 3.4% |
| Equity market risk premium | 6.0% | 7.0% |
| Adjusted beta | 0.64 | 0.8 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 6.7% | 9.4% |
| Tax rate | 12.2% | 13.4% |
| Debt/Equity ratio | 0.1 | 0.1 |
| Cost of debt | 4.0% | 4.5% |
| After-tax WACC | 6.4% | 8.9% |
| Selected WACC | 7.6% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| 1177.HK | Sino Biopharmaceutical Ltd | 0.1 | 0.92 | 0.84 |
| 2005.HK | SSY Group Ltd | 0.44 | 0.65 | 0.47 |
| 2348.HK | Dawnrays Pharmaceutical (Holdings) Ltd | 0.02 | 0.35 | 0.34 |
| 2633.HK | Jacobson Pharma Corporation Ltd | 0.22 | -0.03 | -0.02 |
| 3613.HK | Beijing Tong Ren Tang Chinese Medicine Co Ltd | 0.02 | 0.74 | 0.73 |
| 3933.HK | United Laboratories International Holdings Ltd | 0.12 | 0.78 | 0.71 |
| 512.HK | China Grand Pharmaceutical and Healthcare Holdings Ltd | 0.13 | 0.76 | 0.68 |
| 570.HK | China Traditional Chinese Medicine Holdings Co Ltd | 0.4 | 0.4 | 0.3 |
| 897.HK | Wai Yuen Tong Medicine Holdings Ltd | 1.61 | 0.09 | 0.04 |
| 950.HK | Lee's Pharmaceutical Holdings Ltd | 0.27 | 0.76 | 0.61 |
| Low | High | |
| Unlevered beta | 0.42 | 0.64 |
| Relevered beta | 0.46 | 0.7 |
| Adjusted relevered beta | 0.64 | 0.8 |
1177.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 1177.HK:
cost_of_equity (8.05%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (0.64) + 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.