1673.HK WACC - Weighted Average Cost of Capital

The WACC of Huazhang Technology Holding Ltd (1673.HK) is 10.2%.

The Cost of Equity of Huazhang Technology Holding Ltd (1673.HK) is 11.30%.

The Cost of Debt of Huazhang Technology Holding Ltd (1673.HK) is 6.45%.

	Range	Selected
Cost of equity	9.70% - 12.90%	11.30%
Tax rate	4.20% - 5.40%	4.80%
Cost of debt	5.90% - 7.00%	6.45%
WACC	8.8% - 11.6%	10.2%

WACC

1673.HK WACC calculation

Category	Low	High

Long-term bond rate	2.9%	3.4%
Equity market risk premium	6.0%	7.0%
Adjusted beta	1.14	1.3

Additional risk adjustments	0.0%	0.5%
Cost of equity	9.70%	12.90%

Tax rate	4.20%	5.40%
Debt/Equity ratio	0.26	0.26
Cost of debt	5.90%	7.00%

After-tax WACC	8.8%	11.6%


Selected WACC	10.2%

1673.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 1673.HK:

cost_of_equity (11.30%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (1.14) + 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.