1383.HK WACC - Weighted Average Cost of Capital

The WACC of Suncity Group Holdings Ltd (1383.HK) is 7.0%.

The Cost of Equity of Suncity Group Holdings Ltd (1383.HK) is 30.55%.

The Cost of Debt of Suncity Group Holdings Ltd (1383.HK) is 4.25%.

	Range	Selected
Cost of equity	18.90% - 42.20%	30.55%
Tax rate	3.20% - 4.70%	3.95%
Cost of debt	4.00% - 4.50%	4.25%
WACC	5.5% - 8.5%	7.0%

WACC

1383.HK WACC calculation

Category	Low	High

Long-term bond rate	2.9%	3.4%
Equity market risk premium	6.0%	7.0%
Adjusted beta	2.68	5.49

Additional risk adjustments	0.0%	0.5%
Cost of equity	18.90%	42.20%

Tax rate	3.20%	4.70%
Debt/Equity ratio	8.07	8.07
Cost of debt	4.00%	4.50%

After-tax WACC	5.5%	8.5%


Selected WACC	7.0%

1383.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 1383.HK:

cost_of_equity (30.55%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (2.68) + 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.