208.HK WACC - Weighted Average Cost of Capital
The WACC of Polytec Asset Holdings Ltd (208.HK) is 6.3%.
| Range | Selected | |
| Cost of equity | 5.6% - 8.2% | 6.9% |
| Tax rate | 3.1% - 5.1% | 4.1% |
| Cost of debt | 4.0% - 4.5% | 4.25% |
| WACC | 5.2% - 7.3% | 6.3% |
| Category | Low | High |
| Long-term bond rate | 3.0% | 3.5% |
| Equity market risk premium | 5.3% | 6.3% |
| Adjusted beta | 0.48 | 0.65 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 5.6% | 8.2% |
| Tax rate | 3.1% | 5.1% |
| Debt/Equity ratio | 0.28 | 0.28 |
| Cost of debt | 4.0% | 4.5% |
| After-tax WACC | 5.2% | 7.3% |
| Selected WACC | 6.3% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| 208.HK | Polytec Asset Holdings Ltd | 0.28 | 0.69 | 0.54 |
| 1125.HK | Lai Fung Holdings Ltd | 27.82 | 0.34 | 0.01 |
| 1224.HK | C C Land Holdings Ltd | 2.22 | 0.34 | 0.11 |
| 1278.HK | China New Town Development Co Ltd | 2.52 | 1 | 0.29 |
| 147.HK | International Business Settlement Holdings Ltd | 0.53 | 4.06 | 2.69 |
| 160.HK | Hon Kwok Land Investment Co Ltd | 8.5 | 0.37 | 0.04 |
| 190.HK | HKC (Holdings) Ltd | 0.85 | 0.91 | 0.51 |
| 258.HK | Tomson Group Ltd | 0.16 | 0.45 | 0.39 |
| 3688.HK | Top Spring International Holdings Ltd | 14.1 | 1.05 | 0.07 |
| 989.HK | Ground International Development Ltd | 4.7 | 1.7 | 0.31 |
| Low | High | |
| Unlevered beta | 0.22 | 0.34 |
| Relevered beta | 0.22 | 0.48 |
| Adjusted relevered beta | 0.48 | 0.65 |
208.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 208.HK:
cost_of_equity (6.90%) = risk_free_rate (3.25%) + equity_risk_premium (5.80%) * adjusted_beta (0.48) + 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.