1809.HK WACC - Weighted Average Cost of Capital

The WACC of Prinx Chengshan (Cayman) Holding Ltd (1809.HK) is 8.9%.

The Cost of Equity of Prinx Chengshan (Cayman) Holding Ltd (1809.HK) is 10.70%.

The Cost of Debt of Prinx Chengshan (Cayman) Holding Ltd (1809.HK) is 4.25%.

	Range	Selected
Cost of equity	9.10% - 12.30%	10.70%
Tax rate	7.30% - 9.60%	8.45%
Cost of debt	4.00% - 4.50%	4.25%
WACC	7.7% - 10.1%	8.9%

WACC

1809.HK WACC calculation

Category	Low	High

Long-term bond rate	2.9%	3.4%
Equity market risk premium	6.0%	7.0%
Adjusted beta	1.05	1.21

Additional risk adjustments	0.0%	0.5%
Cost of equity	9.10%	12.30%

Tax rate	7.30%	9.60%
Debt/Equity ratio	0.36	0.36
Cost of debt	4.00%	4.50%

After-tax WACC	7.7%	10.1%


Selected WACC	8.9%

1809.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 1809.HK:

cost_of_equity (10.70%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (1.05) + 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.