1571.HK WACC - Weighted Average Cost of Capital

The WACC of Xin Point Holdings Ltd (1571.HK) is 11.0%.

The Cost of Equity of Xin Point Holdings Ltd (1571.HK) is 11.20%.

The Cost of Debt of Xin Point Holdings Ltd (1571.HK) is 4.25%.

	Range	Selected
Cost of equity	9.70% - 12.70%	11.20%
Tax rate	16.90% - 17.90%	17.40%
Cost of debt	4.00% - 4.50%	4.25%
WACC	9.5% - 12.4%	11.0%

WACC

1571.HK WACC calculation

Category	Low	High

Long-term bond rate	2.9%	3.4%
Equity market risk premium	6.0%	7.0%
Adjusted beta	1.14	1.27

Additional risk adjustments	0.0%	0.5%
Cost of equity	9.70%	12.70%

Tax rate	16.90%	17.90%
Debt/Equity ratio	0.04	0.04
Cost of debt	4.00%	4.50%

After-tax WACC	9.5%	12.4%


Selected WACC	11.0%

1571.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 1571.HK:

cost_of_equity (11.20%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (1.14) + 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.