2136.HK WACC - Weighted Average Cost of Capital
The WACC of Lifestyle China Group Ltd (2136.HK) is 8.9%.
| Range | Selected | |
| Cost of equity | 5.5% - 7.5% | 6.5% |
| Tax rate | 25.7% - 32.8% | 29.25% |
| Cost of debt | 4.4% - 22.9% | 13.65% |
| WACC | 3.6% - 14.2% | 8.9% |
| Category | Low | High |
| Long-term bond rate | 2.9% | 3.4% |
| Equity market risk premium | 6.0% | 7.0% |
| Adjusted beta | 0.44 | 0.52 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 5.5% | 7.5% |
| Tax rate | 25.7% | 32.8% |
| Debt/Equity ratio | 5.58 | 5.58 |
| Cost of debt | 4.4% | 22.9% |
| After-tax WACC | 3.6% | 14.2% |
| Selected WACC | 8.9% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| 2136.HK | Lifestyle China Group Ltd | 5.58 | 0.25 | 0.05 |
| 006370.KS | Daegu Department Store Co Ltd | 4.11 | 0.13 | 0.03 |
| 162.HK | Century Ginwa Retail Holdings Ltd | 73.32 | 0.36 | 0.01 |
| 244.HK | The Sincere Company Ltd | 0.54 | -0.05 | -0.04 |
| 289.HK | Wing On Company International Ltd | 0.03 | 0.07 | 0.07 |
| 600306.SS | Shenyang Commercial City Co Ltd | 1.47 | -0.98 | -0.47 |
| 825.HK | New World Department Store China Ltd | 9.27 | 1.43 | 0.19 |
| 8254.T | Saikaya Department Store Co Ltd | 4.23 | 0.29 | 0.07 |
| 97.HK | Henderson Investment Ltd | 1.71 | 0.42 | 0.19 |
| 984.HK | AEON Stores Hong Kong Co Ltd | 35.51 | 0.88 | 0.03 |
| Low | High | |
| Unlevered beta | 0.03 | 0.06 |
| Relevered beta | 0.16 | 0.28 |
| Adjusted relevered beta | 0.44 | 0.52 |
2136.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 2136.HK:
cost_of_equity (6.50%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (0.44) + 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.