1971.HK WACC - Weighted Average Cost of Capital
The WACC of Redsun Services Group Ltd (1971.HK) is 11.2%.
| Range | Selected | |
| Cost of equity | 8.2% - 11.8% | 10% |
| Tax rate | 30.1% - 42.8% | 36.45% |
| Cost of debt | 4.0% - 52.5% | 28.25% |
| WACC | 7.2% - 15.1% | 11.2% |
| Category | Low | High |
| Long-term bond rate | 2.9% | 3.4% |
| Equity market risk premium | 6.0% | 7.0% |
| Adjusted beta | 0.89 | 1.14 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 8.2% | 11.8% |
| Tax rate | 30.1% | 42.8% |
| Debt/Equity ratio | 0.22 | 0.22 |
| Cost of debt | 4.0% | 52.5% |
| After-tax WACC | 7.2% | 15.1% |
| Selected WACC | 11.2% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| 1971.HK | Redsun Services Group Ltd | 0.22 | 0.92 | 0.8 |
| 000056.SZ | Shenzhen Wongtee International Enterprise Co Ltd | 1.27 | 1.82 | 0.98 |
| 002968.SZ | Chongqing New Dazheng Property Group Co Ltd | 0.04 | 1.19 | 1.16 |
| 1895.HK | Xinyuan Property Management Service (Cayman) Ltd | 0.17 | 0.68 | 0.61 |
| 1922.HK | Yincheng Life Service Co Ltd | 0.37 | 0.09 | 0.07 |
| 2168.HK | Kaisa Prosperity Holdings Ltd | 0.02 | 1.58 | 1.56 |
| 3603.HK | Xinji Shaxi Group Co Ltd | 17.49 | 0.75 | 0.06 |
| 6093.HK | Hevol Services Group Co Ltd | 0.15 | 0.21 | 0.19 |
| 873.HK | Shimao Services Holdings Ltd | 0.34 | 2.08 | 1.69 |
| 900939.SS | Shanghai Huili Building Materials Co Ltd | 0.01 | 1.48 | 1.47 |
| Low | High | |
| Unlevered beta | 0.72 | 1.06 |
| Relevered beta | 0.84 | 1.21 |
| Adjusted relevered beta | 0.89 | 1.14 |
1971.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 1971.HK:
cost_of_equity (10.00%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (0.89) + 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.