185.HK WACC - Weighted Average Cost of Capital
The WACC of Zensun Enterprises Ltd (185.HK) is 4.5%.
| Range | Selected | |
| Cost of equity | 27.7% - 52.7% | 40.2% |
| Tax rate | 33.5% - 38.4% | 35.95% |
| Cost of debt | 5.8% - 7.0% | 6.4% |
| WACC | 4.1% - 4.9% | 4.5% |
| Category | Low | High |
| Long-term bond rate | 2.9% | 3.4% |
| Equity market risk premium | 6.0% | 7.0% |
| Adjusted beta | 4.15 | 7 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 27.7% | 52.7% |
| Tax rate | 33.5% | 38.4% |
| Debt/Equity ratio | 84.67 | 84.67 |
| Cost of debt | 5.8% | 7.0% |
| After-tax WACC | 4.1% | 4.9% |
| Selected WACC | 4.5% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| 185.HK | Zensun Enterprises Ltd | 84.67 | 0.13 | 0 |
| 1240.HK | CNQC International Holdings Ltd | 21.91 | 0.15 | 0.01 |
| 190.HK | HKC (Holdings) Ltd | 0.85 | 0.91 | 0.59 |
| 208.HK | Polytec Asset Holdings Ltd | 0.28 | 0.69 | 0.58 |
| 2330.HK | China Uptown Group Co Ltd | 0.2 | 0.28 | 0.25 |
| 258.HK | Tomson Group Ltd | 0.2 | 0.43 | 0.38 |
| 34.HK | Kowloon Development Co Ltd | 5.24 | 0.6 | 0.14 |
| 563.HK | Shanghai Industrial Urban Development Group Ltd | 12.95 | 0.88 | 0.1 |
| 845.HK | Glorious Property Holdings Ltd | 317.23 | 1.36 | 0.01 |
| 95.HK | LVGEM (China) Real Estate Investment Co Ltd | 25.37 | 1.96 | 0.11 |
| Low | High | |
| Unlevered beta | 0.11 | 0.18 |
| Relevered beta | 5.7 | 9.96 |
| Adjusted relevered beta | 4.15 | 7 |
185.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 185.HK:
cost_of_equity (40.20%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (4.15) + 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.