Category	Low	High

Long-term bond rate	2.9%	3.4%
Equity market risk premium	6.0%	7.0%
Adjusted beta	1.62	1.9

Additional risk adjustments	0.0%	0.5%
Cost of equity	12.6%	17.2%

Tax rate	13.1%	19.9%
Debt/Equity ratio	0.82	0.82
Cost of debt	4.0%	4.5%

After-tax WACC	8.5%	11.1%


Selected WACC	9.8%

1900.HK WACC - Detailed calculations of Beta

		Debt/Equity		Unlevered
Peers	Company Name	ratio	Beta	beta

1900.HK	China ITS Holdings Co Ltd	0.82	0.75	0.44
002771.SZ	Beijing Transtrue Technology Inc	0.04	1.44	1.39
1075.HK	Capinfo Company Ltd	0.07	0.8	0.75
300310.SZ	Eastone Century Technology Co Ltd	0.02	1.97	1.94
300469.SZ	Trust Alliance Information Development Inc Ltd Shanghai	0.03	1.36	1.33
300588.SZ	Xinjiang Sailing Information Technology Co Ltd	0	1.44	1.44
300925.SZ	Shenzhen Farben Information Technology Co Ltd	0.03	2.01	1.96
600289.SS	Bright Oceans Inter-Telecom Corp	0.02	0.88	0.87
605398.SS	Shanghai New Centurion Network Information Technology Co Ltd	0	1.4	1.4
8045.HK	Jiangsu Nandasoft Technology Company Limited	2.93	1.09	0.32

	Low	High

Unlevered beta	1.14	1.39
Relevered beta	1.93	2.34
Adjusted relevered beta	1.62	1.9

1900.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 1900.HK:

cost_of_equity (14.90%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (1.62) + 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.