1871.HK WACC - Weighted Average Cost of Capital
The WACC of China Oriented International Holdings Ltd (1871.HK) is 5.9%.
| Range | Selected | |
| Cost of equity | 5.3% - 6.9% | 6.1% |
| Tax rate | 23.7% - 33.1% | 28.4% |
| Cost of debt | 7.0% - 8.2% | 7.6% |
| WACC | 5.3% - 6.5% | 5.9% |
| Category | Low | High |
| Long-term bond rate | 2.9% | 3.4% |
| Equity market risk premium | 6.0% | 7.0% |
| Adjusted beta | 0.41 | 0.43 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 5.3% | 6.9% |
| Tax rate | 23.7% | 33.1% |
| Debt/Equity ratio | 0.41 | 0.41 |
| Cost of debt | 7.0% | 8.2% |
| After-tax WACC | 5.3% | 6.5% |
| Selected WACC | 5.9% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| 1871.HK | China Oriented International Holdings Ltd | 0.41 | 0.44 | 0.34 |
| 1449.HK | Leader Education Ltd | 8.13 | 0.62 | 0.09 |
| 1565.HK | Virscend Education Company Ltd | 3.04 | 0.2 | 0.06 |
| 1593.HK | Chen Lin Education Group Holdings Ltd | 2.15 | 0.03 | 0.01 |
| 1598.HK | China 21st Century Education Group Ltd | 8.04 | 0.7 | 0.11 |
| 1756.HK | Huali University Group Ltd | 3.5 | 0.33 | 0.09 |
| 1758.HK | Bojun Education Company Ltd | 12.48 | -0.35 | -0.04 |
| 1851.HK | China Gingko Education Group Company Ltd | 0.71 | 0.25 | 0.17 |
| 1969.HK | China Chunlai Education Group Co Ltd | 0.49 | 0.19 | 0.14 |
| 600455.SS | ButOne Information Corporation XiAn | 0.27 | 0.94 | 0.79 |
| Low | High | |
| Unlevered beta | 0.09 | 0.12 |
| Relevered beta | 0.12 | 0.15 |
| Adjusted relevered beta | 0.41 | 0.43 |
1871.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 1871.HK:
cost_of_equity (6.10%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (0.41) + 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.