1431.HK WACC - Weighted Average Cost of Capital
The WACC of YuanShengTai Dairy Farm Ltd (1431.HK) is 7.0%.
| Range | Selected | |
| Cost of equity | 8.1% - 11.8% | 9.95% |
| Tax rate | 22.1% - 22.3% | 22.2% |
| Cost of debt | 4.0% - 4.5% | 4.25% |
| WACC | 5.9% - 8.2% | 7.0% |
| Category | Low | High |
| Long-term bond rate | 2.9% | 3.4% |
| Equity market risk premium | 6.0% | 7.0% |
| Adjusted beta | 0.87 | 1.14 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 8.1% | 11.8% |
| Tax rate | 22.1% | 22.3% |
| Debt/Equity ratio | 0.77 | 0.77 |
| Cost of debt | 4.0% | 4.5% |
| After-tax WACC | 5.9% | 8.2% |
| Selected WACC | 7.0% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| 1431.HK | YuanShengTai Dairy Farm Ltd | 0.77 | 0.68 | 0.42 |
| 1432.HK | China Shengmu Organic Milk Ltd | 1.2 | 0.48 | 0.25 |
| 1492.HK | China Zhongdi Dairy Holdings Co Ltd | 1.08 | 0.05 | 0.03 |
| 300175.SZ | Lontrue Co Ltd | 0.01 | 1.25 | 1.25 |
| 300511.SZ | Shanghai Xuerong Biotechnology Co Ltd | 0.59 | 1.6 | 1.09 |
| 600108.SS | Gansu Yasheng Industrial Group Co Ltd | 0.71 | 0.86 | 0.56 |
| 600251.SS | Xinjiang Guannong Fruit & Antler Co Ltd | 0.43 | 1.04 | 0.78 |
| 600354.SS | Gansu Dunhuang Seed Group Co Ltd | 0.09 | 0.99 | 0.92 |
| 600359.SS | Xinjiang Talimu Agriculture Development Co Ltd | 0.14 | 0.81 | 0.73 |
| 600540.SS | Xinjiang Sayram Modern Agriculture Co Ltd | 1.2 | 0.65 | 0.34 |
| Low | High | |
| Unlevered beta | 0.5 | 0.75 |
| Relevered beta | 0.81 | 1.21 |
| Adjusted relevered beta | 0.87 | 1.14 |
1431.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 1431.HK:
cost_of_equity (9.95%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (0.87) + 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.