1666.HK WACC - Weighted Average Cost of Capital

The WACC of Tong Ren Tang Technologies Co Ltd (1666.HK) is 9.3%.

The Cost of Equity of Tong Ren Tang Technologies Co Ltd (1666.HK) is 11.70%.

The Cost of Debt of Tong Ren Tang Technologies Co Ltd (1666.HK) is 4.25%.

	Range	Selected
Cost of equity	10.10% - 13.30%	11.70%
Tax rate	16.40% - 16.70%	16.55%
Cost of debt	4.00% - 4.50%	4.25%
WACC	8.1% - 10.5%	9.3%

WACC

1666.HK WACC calculation

Category	Low	High

Long-term bond rate	2.9%	3.4%
Equity market risk premium	6.0%	7.0%
Adjusted beta	1.21	1.35

Additional risk adjustments	0.0%	0.5%
Cost of equity	10.10%	13.30%

Tax rate	16.40%	16.70%
Debt/Equity ratio	0.41	0.41
Cost of debt	4.00%	4.50%

After-tax WACC	8.1%	10.5%


Selected WACC	9.3%

1666.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 1666.HK:

cost_of_equity (11.70%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (1.21) + 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.