The WACC of Brainhole Technology Ltd (2203.HK) is 5.1%.
Range | Selected | |
Cost of equity | 5.1% - 7.5% | 6.3% |
Tax rate | 6.9% - 9.2% | 8.05% |
Cost of debt | 4.0% - 4.5% | 4.25% |
WACC | 4.4% - 5.7% | 5.1% |
Category | Low | High |
Long-term bond rate | 2.9% | 3.4% |
Equity market risk premium | 6.0% | 7.0% |
Adjusted beta | 0.37 | 0.52 |
Additional risk adjustments | 0.0% | 0.5% |
Cost of equity | 5.1% | 7.5% |
Tax rate | 6.9% | 9.2% |
Debt/Equity ratio | 1.04 | 1.04 |
Cost of debt | 4.0% | 4.5% |
After-tax WACC | 4.4% | 5.7% |
Selected WACC | 5.1% | |
Debt/Equity | Unlevered | |||
Peers | Company Name | ratio | Beta | beta |
2203.HK | Brainhole Technology Ltd | 1.04 | 0.6 | 0.3 |
033050.KQ | Jeongmoon Information Co Ltd | 0.27 | 0.41 | 0.33 |
1305.HK | Wai Chi Holdings Co Ltd | 2.25 | 0.03 | 0.01 |
1679.HK | Risecomm Group Holdings Ltd | 7.29 | 0.07 | 0.01 |
243.HK | QPL International Holdings Ltd | 0.93 | 1.09 | 0.59 |
3383.TW | Genesis Photonics Inc | 19.77 | 0.81 | 0.04 |
724.HK | Ruixin International Holdings Ltd | 18.89 | -0.15 | -0.01 |
8150.HK | Seamless Green China (Holdings) Ltd | 2.27 | -0.28 | -0.09 |
8490.HK | Niche-Tech Group Ltd | 1.45 | 0.2 | 0.09 |
BXE.SI | CDW Holding Ltd | 0.32 | 0.29 | 0.22 |
Low | High | |
Unlevered beta | 0.03 | 0.14 |
Relevered beta | 0.06 | 0.28 |
Adjusted relevered beta | 0.37 | 0.52 |
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 2203.HK:
cost_of_equity (6.30%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (0.37) + 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.