1393.HK WACC - Weighted Average Cost of Capital

The WACC of Hidili Industry International Development Ltd (1393.HK) is 6.9%.

The Cost of Equity of Hidili Industry International Development Ltd (1393.HK) is 38.15%.

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

	Range	Selected
Cost of equity	30.10% - 46.20%	38.15%
Tax rate	2.90% - 6.90%	4.90%
Cost of debt	4.00% - 8.10%	6.05%
WACC	4.8% - 8.9%	6.9%

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	4.55	6.07

Additional risk adjustments	0.0%	0.5%
Cost of equity	30.10%	46.20%

Tax rate	2.90%	6.90%
Debt/Equity ratio	27.55	27.55
Cost of debt	4.00%	8.10%

After-tax WACC	4.8%	8.9%


Selected WACC	6.9%

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 (38.15%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (4.55) + 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.