1831.HK WACC - Weighted Average Cost of Capital
The WACC of Shifang Holding Ltd (1831.HK) is 6.1%.
| Range | Selected | |
| Cost of equity | 5.1% - 7.3% | 6.2% |
| Tax rate | 0.3% - 7.9% | 4.1% |
| Cost of debt | 4.0% - 7.0% | 5.5% |
| WACC | 5.0% - 7.2% | 6.1% |
| Category | Low | High |
| Long-term bond rate | 2.9% | 3.4% |
| Equity market risk premium | 6.0% | 7.0% |
| Adjusted beta | 0.37 | 0.49 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 5.1% | 7.3% |
| Tax rate | 0.3% | 7.9% |
| Debt/Equity ratio | 0.12 | 0.12 |
| Cost of debt | 4.0% | 7.0% |
| After-tax WACC | 5.0% | 7.2% |
| Selected WACC | 6.1% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| 1831.HK | Shifang Holding Ltd | 0.12 | 2.56 | 2.28 |
| 002751.SZ | Shenzhen ESUN Display Co Ltd | 9.79 | 0.76 | 0.07 |
| 1000.HK | Beijing Media Corp Ltd | 0.03 | 0.39 | 0.38 |
| 1640.HK | Ruicheng China Media Group Ltd | 0.04 | 0.02 | 0.02 |
| 1661.HK | Wisdom Sports Group | 0.07 | 0 | 0 |
| 300392.SZ | Beijing Tensyn Digital Marketing Technology Joint Stock Co | 12.66 | -0.11 | -0.01 |
| 300781.SZ | Guangdong Insight Brand Marketing Group Co Ltd | 0.01 | 1.74 | 1.72 |
| 603729.SS | Shanghai LongYun Media Group Co Ltd | 0.1 | 1.49 | 1.35 |
| 8500.HK | Icon Culture Global Co Ltd | 0.05 | -0.08 | -0.08 |
| 863.HK | Bc Technology Group Ltd | 0.01 | 0.1 | 0.1 |
| 9919.HK | Activation Group Holdings Ltd | 0.01 | 0.48 | 0.47 |
| Low | High | |
| Unlevered beta | 0.07 | 0.38 |
| Relevered beta | 0.06 | 0.24 |
| Adjusted relevered beta | 0.37 | 0.49 |
1831.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 1831.HK:
cost_of_equity (6.20%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (0.37) + 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.