1966.HK WACC - Weighted Average Cost of Capital

The WACC of China SCE Group Holdings Ltd (1966.HK) is 4.5%.

The Cost of Equity of China SCE Group Holdings Ltd (1966.HK) is 22.10%.

The Cost of Debt of China SCE Group Holdings Ltd (1966.HK) is 6.05%.

	Range	Selected
Cost of equity	11.80% - 32.40%	22.10%
Tax rate	24.70% - 33.80%	29.25%
Cost of debt	5.10% - 7.00%	6.05%
WACC	3.9% - 5.0%	4.5%

WACC

1966.HK WACC calculation

Category	Low	High

Long-term bond rate	2.9%	3.4%
Equity market risk premium	6.0%	7.0%
Adjusted beta	1.49	4.08

Additional risk adjustments	0.0%	0.5%
Cost of equity	11.80%	32.40%

Tax rate	24.70%	33.80%
Debt/Equity ratio	79.19	79.19
Cost of debt	5.10%	7.00%

After-tax WACC	3.9%	5.0%


Selected WACC	4.5%

1966.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 1966.HK:

cost_of_equity (22.10%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (1.49) + 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.