1327.HK WACC - Weighted Average Cost of Capital
The WACC of Luxxu Group Ltd (1327.HK) is 5.9%.
| Range | Selected | |
| Cost of equity | 5.0% - 7.3% | 6.15% |
| Tax rate | 22.1% - 22.3% | 22.2% |
| Cost of debt | 7.0% - 7.0% | 7% |
| WACC | 5.2% - 6.6% | 5.9% |
| Category | Low | High |
| Long-term bond rate | 2.9% | 3.4% |
| Equity market risk premium | 6.0% | 7.0% |
| Adjusted beta | 0.36 | 0.5 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 5.0% | 7.3% |
| Tax rate | 22.1% | 22.3% |
| Debt/Equity ratio | 0.69 | 0.69 |
| Cost of debt | 7.0% | 7.0% |
| After-tax WACC | 5.2% | 6.6% |
| Selected WACC | 5.9% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| 1327.HK | Luxxu Group Ltd | 0.69 | 3.64 | 2.36 |
| 1025.HK | KNT Holdings Ltd | 0.45 | 0.6 | 0.45 |
| 1466.HK | Affluent Partners Holdings Ltd | 0.06 | 0.5 | 0.47 |
| 1520.HK | CEFC Hong Kong Financial Investment Company Ltd | 0.06 | -0.42 | -0.4 |
| 1825.HK | Sterling Group Holdings Ltd | 7.11 | 0.07 | 0.01 |
| 2011.HK | China Apex Group Ltd | 0.1 | 0.01 | 0.01 |
| 442.HK | Hifood Group Holdings Co Ltd | 0.01 | 0.05 | 0.05 |
| 475.HK | Central Development Holdings Ltd | 0.86 | -0.42 | -0.25 |
| 8107.HK | Vision International Holdings Ltd | 0.03 | 0.33 | 0.33 |
| 8507.HK | i.century Holding Ltd | 0.79 | 1.78 | 1.1 |
| 8537.HK | Chong Fai Jewellery Group Holdings Co Ltd | 0.81 | 0.06 | 0.04 |
| Low | High | |
| Unlevered beta | 0.04 | 0.33 |
| Relevered beta | 0.04 | 0.25 |
| Adjusted relevered beta | 0.36 | 0.5 |
1327.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 1327.HK:
cost_of_equity (6.15%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (0.36) + 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.