1745.HK WACC - Weighted Average Cost of Capital
The WACC of Lvji Technology Holdings Inc (1745.HK) is 11.5%.
| Range | Selected | |
| Cost of equity | 11.8% - 14.7% | 13.25% |
| Tax rate | 12.7% - 20.0% | 16.35% |
| Cost of debt | 5.0% - 5.0% | 5% |
| WACC | 10.3% - 12.6% | 11.5% |
| Category | Low | High |
| Long-term bond rate | 2.9% | 3.4% |
| Equity market risk premium | 6.0% | 7.0% |
| Adjusted beta | 1.49 | 1.55 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 11.8% | 14.7% |
| Tax rate | 12.7% | 20.0% |
| Debt/Equity ratio | 0.24 | 0.24 |
| Cost of debt | 5.0% | 5.0% |
| After-tax WACC | 10.3% | 12.6% |
| Selected WACC | 11.5% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| 1745.HK | Lvji Technology Holdings Inc | 0.24 | 1.43 | 1.2 |
| 002279.SZ | Beijing Join-Cheer Software Co Ltd | 0.01 | 1.5 | 1.49 |
| 003007.SZ | Beijing ZZNodeTechnologies Co Ltd | 0.01 | 1.23 | 1.22 |
| 1297.HK | Sinosoft Technology Group Ltd | 0.14 | 0.49 | 0.45 |
| 300081.SZ | Hengxin Shambala Culture Co Ltd | 0.03 | 1.85 | 1.8 |
| 300608.SZ | SI-TECH Information Technology Co Ltd | 0.19 | 1.59 | 1.38 |
| 300624.SZ | Wondershare Technology Group Co Ltd | 0.01 | 2.07 | 2.06 |
| 688004.SS | Beijing Bohui Science & Technology Co Ltd | 0.02 | 1.6 | 1.57 |
| 688058.SS | Beijing Baolande Software Corp | 0 | 1.97 | 1.96 |
| 688365.SS | Hangzhou Raycloud Technology Co Ltd | 0.04 | 1.54 | 1.5 |
| Low | High | |
| Unlevered beta | 1.45 | 1.53 |
| Relevered beta | 1.73 | 1.82 |
| Adjusted relevered beta | 1.49 | 1.55 |
1745.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 1745.HK:
cost_of_equity (13.25%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (1.49) + 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.