1801.HK WACC - Weighted Average Cost of Capital

The WACC of Innovent Biologics Inc (1801.HK) is 9.0%.

The Cost of Equity of Innovent Biologics Inc (1801.HK) is 9.05%.

The Cost of Debt of Innovent Biologics Inc (1801.HK) is 5.75%.

	Range	Selected
Cost of equity	7.60% - 10.50%	9.05%
Tax rate	7.40% - 12.60%	10.00%
Cost of debt	4.50% - 7.00%	5.75%
WACC	7.5% - 10.4%	9.0%

WACC

1801.HK WACC calculation

Category	Low	High

Long-term bond rate	2.9%	3.4%
Equity market risk premium	6.0%	7.0%
Adjusted beta	0.79	0.96

Additional risk adjustments	0.0%	0.5%
Cost of equity	7.60%	10.50%

Tax rate	7.40%	12.60%
Debt/Equity ratio	0.03	0.03
Cost of debt	4.50%	7.00%

After-tax WACC	7.5%	10.4%


Selected WACC	9.0%

1801.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 1801.HK:

cost_of_equity (9.05%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (0.79) + 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.