The WACC of NVC International Holdings Ltd (2222.HK) is 8.9%.
Range | Selected | |
Cost of equity | 7.3% - 10.8% | 9.05% |
Tax rate | 22.1% - 22.3% | 22.2% |
Cost of debt | 4.0% - 9.7% | 6.85% |
WACC | 7.2% - 10.7% | 8.9% |
Category | Low | High |
Long-term bond rate | 2.9% | 3.4% |
Equity market risk premium | 6.0% | 7.0% |
Adjusted beta | 0.74 | 0.99 |
Additional risk adjustments | 0.0% | 0.5% |
Cost of equity | 7.3% | 10.8% |
Tax rate | 22.1% | 22.3% |
Debt/Equity ratio | 0.02 | 0.02 |
Cost of debt | 4.0% | 9.7% |
After-tax WACC | 7.2% | 10.7% |
Selected WACC | 8.9% | |
Debt/Equity | Unlevered | |||
Peers | Company Name | ratio | Beta | beta |
2222.HK | NVC International Holdings Ltd | 0.02 | 0.93 | 0.91 |
000523.SZ | Lonkey Industrial Co Ltd Guangzhou | 0.16 | 1.59 | 1.41 |
000737.SZ | Nafine Chemical Industry Group Co Ltd | 0.41 | 1.24 | 0.94 |
065950.KQ | Welcron Co Ltd | 2.49 | 0.38 | 0.13 |
2023.HK | China Ludao Technology Company Ltd | 2.15 | -0.16 | -0.06 |
600651.SS | Shanghai Feilo Acoustics Co Ltd | 0.09 | 1.47 | 1.37 |
603515.SS | Opple Lighting Co Ltd | 0.01 | 1.33 | 1.32 |
603630.SS | Lafang China Co Ltd | 0 | 1.02 | 1.02 |
7818.T | Transaction Co Ltd | 0.01 | -0.06 | -0.06 |
NTPM.KL | NTPM Holdings Bhd | 1.22 | 0.21 | 0.11 |
Low | High | |
Unlevered beta | 0.6 | 0.97 |
Relevered beta | 0.61 | 0.99 |
Adjusted relevered beta | 0.74 | 0.99 |
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 2222.HK:
cost_of_equity (9.05%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (0.74) + 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.