1393.HK WACC - Weighted Average Cost of Capital

The WACC of Hidili Industry International Development Ltd (1393.HK) is 6.8%.

The Cost of Equity of Hidili Industry International Development Ltd (1393.HK) is 41.70%.

The Cost of Debt of Hidili Industry International Development Ltd (1393.HK) is 6.05%.

	Range	Selected
Cost of equity	33.50% - 49.90%	41.70%
Tax rate	2.90% - 6.90%	4.90%
Cost of debt	4.00% - 8.10%	6.05%
WACC	4.8% - 8.9%	6.8%

WACC

1393.HK WACC calculation

Category	Low	High

Long-term bond rate	2.9%	3.4%
Equity market risk premium	6.0%	7.0%
Adjusted beta	5.13	6.59

Additional risk adjustments	0.0%	0.5%
Cost of equity	33.50%	49.90%

Tax rate	2.90%	6.90%
Debt/Equity ratio	30.87	30.87
Cost of debt	4.00%	8.10%

After-tax WACC	4.8%	8.9%


Selected WACC	6.8%

1393.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 1393.HK:

cost_of_equity (41.70%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (5.13) + 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.