1623.HK WACC - Weighted Average Cost of Capital

The WACC of Hilong Holding Ltd (1623.HK) is 9.5%.

The Cost of Equity of Hilong Holding Ltd (1623.HK) is 46.10%.

The Cost of Debt of Hilong Holding Ltd (1623.HK) is 9.15%.

	Range	Selected
Cost of equity	31.30% - 60.90%	46.10%
Tax rate	22.10% - 22.30%	22.20%
Cost of debt	6.90% - 11.40%	9.15%
WACC	7.0% - 12.1%	9.5%

WACC

1623.HK WACC calculation

Category	Low	High

Long-term bond rate	2.9%	3.4%
Equity market risk premium	6.0%	7.0%
Adjusted beta	4.75	8.17

Additional risk adjustments	0.0%	0.5%
Cost of equity	31.30%	60.90%

Tax rate	22.10%	22.30%
Debt/Equity ratio	15.09	15.09
Cost of debt	6.90%	11.40%

After-tax WACC	7.0%	12.1%


Selected WACC	9.5%

1623.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 1623.HK:

cost_of_equity (46.10%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (4.75) + 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.