1600.HK WACC - Weighted Average Cost of Capital

The WACC of China Tian Lun Gas Holdings Ltd (1600.HK) is 5.9%.

The Cost of Equity of China Tian Lun Gas Holdings Ltd (1600.HK) is 11.80%.

The Cost of Debt of China Tian Lun Gas Holdings Ltd (1600.HK) is 5.65%.

	Range	Selected
Cost of equity	7.20% - 16.40%	11.80%
Tax rate	29.70% - 32.40%	31.05%
Cost of debt	4.80% - 6.50%	5.65%
WACC	4.4% - 7.5%	5.9%

WACC

1600.HK WACC calculation

Category	Low	High

Long-term bond rate	2.9%	3.4%
Equity market risk premium	6.0%	7.0%
Adjusted beta	0.73	1.79

Additional risk adjustments	0.0%	0.5%
Cost of equity	7.20%	16.40%

Tax rate	29.70%	32.40%
Debt/Equity ratio	2.88	2.88
Cost of debt	4.80%	6.50%

After-tax WACC	4.4%	7.5%


Selected WACC	5.9%

1600.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 1600.HK:

cost_of_equity (11.80%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (0.73) + 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.