1338.HK WACC - Weighted Average Cost of Capital
The WACC of BaWang International Group Holding Ltd (1338.HK) is 8.8%.
| Range | Selected | |
| Cost of equity | 7.8% - 10.6% | 9.2% |
| Tax rate | 0.3% - 0.6% | 0.45% |
| Cost of debt | 4.0% - 6.3% | 5.15% |
| WACC | 7.4% - 10.2% | 8.8% |
| Category | Low | High |
| Long-term bond rate | 2.9% | 3.4% |
| Equity market risk premium | 6.0% | 7.0% |
| Adjusted beta | 0.83 | 0.97 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 7.8% | 10.6% |
| Tax rate | 0.3% | 0.6% |
| Debt/Equity ratio | 0.11 | 0.11 |
| Cost of debt | 4.0% | 6.3% |
| After-tax WACC | 7.4% | 10.2% |
| Selected WACC | 8.8% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| 1338.HK | BaWang International Group Holding Ltd | 0.11 | 0.49 | 0.45 |
| 1259.HK | Prosperous Future Holdings Ltd | 0.21 | 1.7 | 1.4 |
| 600249.SS | Liuzhou Liangmianzhen Co Ltd | 0.03 | 0.97 | 0.93 |
| 600530.SS | Shanghai Jiaoda Onlly Co Ltd | 0.03 | 0.58 | 0.56 |
| 600735.SS | Shandong Hiking International Co Ltd | 0.06 | 1.13 | 1.06 |
| 603059.SS | Perfect Group Corp Ltd | 0.26 | 1.03 | 0.82 |
| 603896.SS | Zhejiang Shouxiangu Pharmaceutical Co Ltd | 0.13 | 1.53 | 1.36 |
| 6666.TW | Luo Lih Fen Holding Co Ltd | 0.03 | 0.76 | 0.74 |
| 6896.HK | Golden Throat Holdings Group Co Ltd | 0.12 | 0.24 | 0.22 |
| 8281.HK | China Golden Classic Group Ltd | 0.26 | 0.23 | 0.18 |
| Low | High | |
| Unlevered beta | 0.67 | 0.87 |
| Relevered beta | 0.75 | 0.96 |
| Adjusted relevered beta | 0.83 | 0.97 |
1338.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 1338.HK:
cost_of_equity (9.20%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (0.83) + 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.