1545.HK WACC - Weighted Average Cost of Capital
The WACC of Design Capital Ltd (1545.HK) is 5.6%.
| Range | Selected | |
| Cost of equity | 5.3% - 7.6% | 6.45% |
| Tax rate | 18.6% - 19.9% | 19.25% |
| Cost of debt | 5.1% - 5.1% | 5.1% |
| WACC | 4.9% - 6.4% | 5.6% |
| Category | Low | High |
| Long-term bond rate | 2.9% | 3.4% |
| Equity market risk premium | 6.0% | 7.0% |
| Adjusted beta | 0.4 | 0.54 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 5.3% | 7.6% |
| Tax rate | 18.6% | 19.9% |
| Debt/Equity ratio | 0.51 | 0.51 |
| Cost of debt | 5.1% | 5.1% |
| After-tax WACC | 4.9% | 6.4% |
| Selected WACC | 5.6% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| 1545.HK | Design Capital Ltd | 0.51 | 0.13 | 0.09 |
| 1891.HK | Heng Hup Holdings Ltd | 1.4 | -0.04 | -0.02 |
| 5DS.SI | MegaChem Ltd | 0.53 | 0.32 | 0.22 |
| 7635.T | Sugita Ace Co Ltd | 0.56 | 0.08 | 0.05 |
| A55.SI | Asia Enterprises Holding Ltd | 0.16 | 0.01 | 0.01 |
| AWC.SI | Brook Crompton Holdings Ltd | 0.16 | 0.42 | 0.38 |
| BKA.SI | Sin Heng Heavy Machinery Ltd | 0.07 | 0.3 | 0.29 |
| BTG.SI | HG Metal Manufacturing Ltd | 0.1 | 0.9 | 0.83 |
| P52.SI | Pan-United Corporation Ltd | 0.08 | 0.23 | 0.22 |
| RDR.SI | Incredible Holdings Ltd | 0.42 | -0.1 | -0.08 |
| Low | High | |
| Unlevered beta | 0.08 | 0.22 |
| Relevered beta | 0.1 | 0.31 |
| Adjusted relevered beta | 0.4 | 0.54 |
1545.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 1545.HK:
cost_of_equity (6.45%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (0.4) + 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.