1585.HK WACC - Weighted Average Cost of Capital
The WACC of Yadea Group Holdings Ltd (1585.HK) is 9.7%.
| Range | Selected | |
| Cost of equity | 7.9% - 11.9% | 9.9% |
| Tax rate | 14.9% - 17.6% | 16.25% |
| Cost of debt | 4.0% - 7.8% | 5.9% |
| WACC | 7.8% - 11.7% | 9.7% |
| Category | Low | High |
| Long-term bond rate | 2.9% | 3.4% |
| Equity market risk premium | 6.0% | 7.0% |
| Adjusted beta | 0.84 | 1.15 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 7.9% | 11.9% |
| Tax rate | 14.9% | 17.6% |
| Debt/Equity ratio | 0.03 | 0.03 |
| Cost of debt | 4.0% | 7.8% |
| After-tax WACC | 7.8% | 11.7% |
| Selected WACC | 9.7% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| 1585.HK | Yadea Group Holdings Ltd | 0.03 | 0.6 | 0.58 |
| 000913.SZ | Zhejiang Qjiang Motorcycle Co Ltd | 0.31 | 0.81 | 0.65 |
| 200054.SZ | Chongqing Jianshe Vehicle System Co Ltd | 3.94 | 1.02 | 0.24 |
| 505141.BO | Scooters India Ltd | 0.08 | 1.57 | 1.47 |
| 600609.SS | Shenyang Jinbei Automotive Co Ltd | 0.03 | 1.71 | 1.67 |
| 600877.SS | CETC Energy Joint-Stock Co Ltd | 0 | 1.05 | 1.05 |
| 603766.SS | Loncin Motor Co Ltd | 0.03 | 0.64 | 0.62 |
| 603787.SS | Jiangsu Xinri E-Vehicle Co Ltd | 0.31 | 1.02 | 0.81 |
| ATULAUTO.NS | Atul Auto Ltd | 0.11 | 1.65 | 1.52 |
| TVSMOTOR.NS | TVS Motor Company Ltd | 0.2 | 1.64 | 1.41 |
| Low | High | |
| Unlevered beta | 0.74 | 1.19 |
| Relevered beta | 0.76 | 1.22 |
| Adjusted relevered beta | 0.84 | 1.15 |
1585.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 1585.HK:
cost_of_equity (9.90%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (0.84) + 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.