1589.HK WACC - Weighted Average Cost of Capital

The WACC of China Logistics Property Holdings Co Ltd (1589.HK) is 8.9%.

The Cost of Equity of China Logistics Property Holdings Co Ltd (1589.HK) is 8.70%.

The Cost of Debt of China Logistics Property Holdings Co Ltd (1589.HK) is 11.75%.

	Range	Selected
Cost of equity	7.20% - 10.20%	8.70%
Tax rate	22.50% - 22.60%	22.55%
Cost of debt	7.40% - 16.10%	11.75%
WACC	6.6% - 11.2%	8.9%

WACC

1589.HK WACC calculation

Category	Low	High

Long-term bond rate	3.0%	3.5%
Equity market risk premium	5.3%	6.3%
Adjusted beta	0.79	0.98

Additional risk adjustments	0.0%	0.5%
Cost of equity	7.20%	10.20%

Tax rate	22.50%	22.60%
Debt/Equity ratio	0.8	0.8
Cost of debt	7.40%	16.10%

After-tax WACC	6.6%	11.2%


Selected WACC	8.9%

1589.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 1589.HK:

cost_of_equity (8.70%) = risk_free_rate (3.25%) + equity_risk_premium (5.80%) * adjusted_beta (0.79) + 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.