The WACC of Zhou Hei Ya International Holdings Company Ltd (1458.HK) is 9.7%.
Range | Selected | |
Cost of equity | 9.0% - 11.5% | 10.25% |
Tax rate | 30.2% - 38.9% | 34.55% |
Cost of debt | 4.0% - 4.5% | 4.25% |
WACC | 8.5% - 10.9% | 9.7% |
Category | Low | High |
Long-term bond rate | 2.9% | 3.4% |
Equity market risk premium | 6.0% | 7.0% |
Adjusted beta | 1.02 | 1.09 |
Additional risk adjustments | 0.0% | 0.5% |
Cost of equity | 9.0% | 11.5% |
Tax rate | 30.2% | 38.9% |
Debt/Equity ratio | 0.08 | 0.08 |
Cost of debt | 4.0% | 4.5% |
After-tax WACC | 8.5% | 10.9% |
Selected WACC | 9.7% | |
Debt/Equity | Unlevered | |||
Peers | Company Name | ratio | Beta | beta |
1458.HK | Zhou Hei Ya International Holdings Company Ltd | 0.08 | 0.97 | 0.92 |
002216.SZ | Sanquan Food Co Ltd | 0.08 | 1.46 | 1.39 |
002481.SZ | Yantai Shuangta Food Co Ltd | 0.21 | 1.16 | 1.02 |
002557.SZ | Chacha Food Co Ltd | 0.24 | 1.06 | 0.92 |
002847.SZ | Yankershop Food Co Ltd | 0.03 | 0.81 | 0.79 |
002946.SZ | New Hope Dairy Co Ltd | 0.21 | 0.7 | 0.62 |
600305.SS | Jiangsu Hengshun Vinegar-Industry Co Ltd | 0.01 | 1.02 | 1.01 |
600882.SS | Shanghai Milkground Food Tech Co Ltd | 0.17 | 1.31 | 1.18 |
603027.SS | Qianhe Condiment and Food Co Ltd | 0.01 | 1.68 | 1.67 |
603317.SS | Sichuan Teway Food Group Co Ltd | 0 | 1.49 | 1.48 |
Low | High | |
Unlevered beta | 0.98 | 1.08 |
Relevered beta | 1.03 | 1.13 |
Adjusted relevered beta | 1.02 | 1.09 |
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 1458.HK:
cost_of_equity (10.25%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (1.02) + 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.