1651.HK WACC - Weighted Average Cost of Capital

The WACC of Precision Tsugami (China) Corporation Ltd (1651.HK) is 9.4%.

The Cost of Equity of Precision Tsugami (China) Corporation Ltd (1651.HK) is 9.40%.

The Cost of Debt of Precision Tsugami (China) Corporation Ltd (1651.HK) is 18.55%.

	Range	Selected
Cost of equity	8.30% - 10.50%	9.40%
Tax rate	31.20% - 31.30%	31.25%
Cost of debt	4.00% - 33.10%	18.55%
WACC	8.3% - 10.5%	9.4%

WACC

1651.HK WACC calculation

Category	Low	High

Long-term bond rate	2.9%	3.4%
Equity market risk premium	6.0%	7.0%
Adjusted beta	0.9	0.95

Additional risk adjustments	0.0%	0.5%
Cost of equity	8.30%	10.50%

Tax rate	31.20%	31.30%
Debt/Equity ratio	0	0
Cost of debt	4.00%	33.10%

After-tax WACC	8.3%	10.5%


Selected WACC	9.4%

1651.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 1651.HK:

cost_of_equity (9.40%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (0.9) + 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.