2096.HK WACC - Weighted Average Cost of Capital
The WACC of Simcere Pharmaceutical Group Ltd (2096.HK) is 10.0%.
| Range | Selected | |
| Cost of equity | 9.1% - 11.6% | 10.35% |
| Tax rate | 6.0% - 8.4% | 7.2% |
| Cost of debt | 4.0% - 4.5% | 4.25% |
| WACC | 8.9% - 11.2% | 10.0% |
| Category | Low | High |
| Long-term bond rate | 2.9% | 3.4% |
| Equity market risk premium | 6.0% | 7.0% |
| Adjusted beta | 1.04 | 1.1 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 9.1% | 11.6% |
| Tax rate | 6.0% | 8.4% |
| Debt/Equity ratio | 0.05 | 0.05 |
| Cost of debt | 4.0% | 4.5% |
| After-tax WACC | 8.9% | 11.2% |
| Selected WACC | 10.0% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| 2096.HK | Simcere Pharmaceutical Group Ltd | 0.05 | 0.59 | 0.57 |
| 000423.SZ | Dong-E-E-Jiao Co Ltd | 0 | 1.18 | 1.18 |
| 002019.SZ | Yifan Pharmaceutical Co Ltd | 0.14 | 1.1 | 0.97 |
| 002390.SZ | Guizhou Xinbang Pharmaceutical Co Ltd | 0.15 | 1.34 | 1.17 |
| 002399.SZ | Shenzhen Hepalink Pharmaceutical Group Co Ltd | 0.2 | 1.14 | 0.96 |
| 002603.SZ | Shijiazhuang Yiling Pharmaceutical Co Ltd | 0 | 1.06 | 1.06 |
| 002626.SZ | Xiamen Kingdomway Group Co | 0.11 | 1.31 | 1.19 |
| 002793.SZ | Luoxin Pharmaceuticals Group Stock Co Ltd | 0.31 | 1.35 | 1.05 |
| 2186.HK | Luye Pharma Group Ltd | 0.87 | 0.88 | 0.48 |
| 600566.SS | Hubei Jumpcan Pharmaceutical Co Ltd | 0.05 | 1.4 | 1.34 |
| Low | High | |
| Unlevered beta | 1.02 | 1.11 |
| Relevered beta | 1.06 | 1.15 |
| Adjusted relevered beta | 1.04 | 1.1 |
2096.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 2096.HK:
cost_of_equity (10.35%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (1.04) + 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.