1366.HK WACC - Weighted Average Cost of Capital

The WACC of Jiangnan Group Ltd (1366.HK) is 9.1%.

The Cost of Equity of Jiangnan Group Ltd (1366.HK) is 8.80%.

The Cost of Debt of Jiangnan Group Ltd (1366.HK) is 11.35%.

	Range	Selected
Cost of equity	6.40% - 11.20%	8.80%
Tax rate	15.80% - 19.00%	17.40%
Cost of debt	8.10% - 14.60%	11.35%
WACC	6.6% - 11.6%	9.1%

WACC

1366.HK WACC calculation

Category	Low	High

Long-term bond rate	2.9%	3.4%
Equity market risk premium	6.0%	7.0%
Adjusted beta	0.59	1.06

Additional risk adjustments	0.0%	0.5%
Cost of equity	6.40%	11.20%

Tax rate	15.80%	19.00%
Debt/Equity ratio	1.61	1.61
Cost of debt	8.10%	14.60%

After-tax WACC	6.6%	11.6%


Selected WACC	9.1%

1366.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 1366.HK:

cost_of_equity (8.80%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (0.59) + 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.