1623.HK WACC - Weighted Average Cost of Capital

The WACC of Hilong Holding Ltd (1623.HK) is 7.9%.

The Cost of Equity of Hilong Holding Ltd (1623.HK) is 49.60%.

The Cost of Debt of Hilong Holding Ltd (1623.HK) is 6.65%.

	Range	Selected
Cost of equity	35.60% - 63.60%	49.60%
Tax rate	22.10% - 22.30%	22.20%
Cost of debt	6.00% - 7.30%	6.65%
WACC	6.6% - 9.2%	7.9%

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	5.47	8.56

Additional risk adjustments	0.0%	0.5%
Cost of equity	35.60%	63.60%

Tax rate	22.10%	22.30%
Debt/Equity ratio	15.51	15.51
Cost of debt	6.00%	7.30%

After-tax WACC	6.6%	9.2%


Selected WACC	7.9%

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 (49.60%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (5.47) + 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.