1866.HK WACC - Weighted Average Cost of Capital
The WACC of China Xlx Fertiliser Ltd (1866.HK) is 7.1%.
| Range | Selected | |
| Cost of equity | 10.9% - 16.2% | 13.55% |
| Tax rate | 16.4% - 17.0% | 16.7% |
| Cost of debt | 4.3% - 4.9% | 4.6% |
| WACC | 6.1% - 8.2% | 7.1% |
| Category | Low | High |
| Long-term bond rate | 2.9% | 3.4% |
| Equity market risk premium | 6.0% | 7.0% |
| Adjusted beta | 1.35 | 1.76 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 10.9% | 16.2% |
| Tax rate | 16.4% | 17.0% |
| Debt/Equity ratio | 1.95 | 1.95 |
| Cost of debt | 4.3% | 4.9% |
| After-tax WACC | 6.1% | 8.2% |
| Selected WACC | 7.1% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| 1866.HK | China Xlx Fertiliser Ltd | 1.95 | 0.47 | 0.18 |
| 000422.SZ | Hubei Yihua Chemical Industry Co Ltd | 1.07 | 1.18 | 0.62 |
| 002004.SZ | Huapont Life Sciences Co Ltd | 1.31 | 0.95 | 0.46 |
| 002274.SZ | Jiangsu Huachang Chemical Co Ltd | 0.14 | 0.97 | 0.87 |
| 002470.SZ | Kingenta Ecological Engineering Group Co Ltd | 0.98 | 1.46 | 0.81 |
| 002538.SZ | Anhui Sierte Fertilizer Industry Ltd Co | 0.01 | 0.86 | 0.85 |
| 002539.SZ | Chengdu Wintrue Holding Co Ltd | 0.97 | 0.88 | 0.49 |
| 3983.HK | China BlueChemical Ltd | 0.24 | 0.62 | 0.51 |
| 600078.SS | Jiangsu Chengxing Phosph-Chemical Co Ltd | 0.59 | 1.24 | 0.83 |
| 603599.SS | Anhui Guangxin Agrochemical Co Ltd | 0.35 | 1.41 | 1.09 |
| Low | High | |
| Unlevered beta | 0.58 | 0.82 |
| Relevered beta | 1.52 | 2.13 |
| Adjusted relevered beta | 1.35 | 1.76 |
1866.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 1866.HK:
cost_of_equity (13.55%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (1.35) + 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.