1895.HK WACC - Weighted Average Cost of Capital

The WACC of Xinyuan Property Management Service (Cayman) Ltd (1895.HK) is 8.2%.

The Cost of Equity of Xinyuan Property Management Service (Cayman) Ltd (1895.HK) is 8.95%.

The Cost of Debt of Xinyuan Property Management Service (Cayman) Ltd (1895.HK) is 5.00%.

	Range	Selected
Cost of equity	6.90% - 11.00%	8.95%
Tax rate	22.50% - 30.20%	26.35%
Cost of debt	5.00% - 5.00%	5.00%
WACC	6.5% - 9.9%	8.2%

WACC

1895.HK WACC calculation

Category	Low	High

Long-term bond rate	2.9%	3.4%
Equity market risk premium	6.0%	7.0%
Adjusted beta	0.68	1.02

Additional risk adjustments	0.0%	0.5%
Cost of equity	6.90%	11.00%

Tax rate	22.50%	30.20%
Debt/Equity ratio	0.18	0.18
Cost of debt	5.00%	5.00%

After-tax WACC	6.5%	9.9%


Selected WACC	8.2%

1895.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 1895.HK:

cost_of_equity (8.95%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (0.68) + 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.