1234.HK WACC - Weighted Average Cost of Capital
The WACC of China Lilang Ltd (1234.HK) is 9.8%.
| Range | Selected | |
| Cost of equity | 10.4% - 13.4% | 11.9% |
| Tax rate | 18.8% - 19.5% | 19.15% |
| Cost of debt | 4.0% - 4.5% | 4.25% |
| WACC | 8.6% - 11.0% | 9.8% |
| Category | Low | High |
| Long-term bond rate | 2.9% | 3.4% |
| Equity market risk premium | 6.0% | 7.0% |
| Adjusted beta | 1.25 | 1.36 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 10.4% | 13.4% |
| Tax rate | 18.8% | 19.5% |
| Debt/Equity ratio | 0.33 | 0.33 |
| Cost of debt | 4.0% | 4.5% |
| After-tax WACC | 8.6% | 11.0% |
| Selected WACC | 9.8% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| 1234.HK | China Lilang Ltd | 0.33 | 0.44 | 0.35 |
| 000982.SZ | Ningxia Zhongyin Cashmere Co Ltd | 0.23 | 1.43 | 1.2 |
| 002003.SZ | Zhejiang Weixing Industrial Development Co Ltd | 0.06 | 0.37 | 0.36 |
| 002154.SZ | Baoxiniao Holding Co Ltd | 0.11 | 1.6 | 1.47 |
| 002345.SZ | Guangdong CHJ Industry Co Ltd | 0.05 | 1.18 | 1.13 |
| 002832.SZ | BIEM.L .FDLKK Garment Co Ltd | 0.09 | 1.85 | 1.72 |
| 3306.HK | JNBY Design Ltd | 0.05 | 0.56 | 0.54 |
| 3818.HK | China Dongxiang (Group) Co Ltd | 0.02 | 1.26 | 1.24 |
| 600630.SS | Shanghai Dragon Corp | 0.09 | 1.53 | 1.43 |
| 601566.SS | Joeone Co Ltd | 0.17 | 1.17 | 1.03 |
| Low | High | |
| Unlevered beta | 1.09 | 1.22 |
| Relevered beta | 1.37 | 1.54 |
| Adjusted relevered beta | 1.25 | 1.36 |
1234.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 1234.HK:
cost_of_equity (11.90%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (1.25) + 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.