2307.HK WACC - Weighted Average Cost of Capital
The WACC of Kam Hing International Holdings Ltd (2307.HK) is 6.8%.
| Range | Selected | |
| Cost of equity | 11.2% - 23.7% | 17.45% |
| Tax rate | 11.2% - 17.1% | 14.15% |
| Cost of debt | 4.0% - 8.1% | 6.05% |
| WACC | 4.6% - 9.0% | 6.8% |
| Category | Low | High |
| Long-term bond rate | 2.9% | 3.4% |
| Equity market risk premium | 6.0% | 7.0% |
| Adjusted beta | 1.39 | 2.84 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 11.2% | 23.7% |
| Tax rate | 11.2% | 17.1% |
| Debt/Equity ratio | 6.61 | 6.61 |
| Cost of debt | 4.0% | 8.1% |
| After-tax WACC | 4.6% | 9.0% |
| Selected WACC | 6.8% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| 2307.HK | Kam Hing International Holdings Ltd | 6.61 | 0.22 | 0.03 |
| 002394.SZ | Jiangsu Lianfa Textile Co Ltd | 0.42 | 1.33 | 0.98 |
| 002427.SZ | Zhejiang Unifull Industrial Fibre Co Ltd | 0.11 | 1.26 | 1.16 |
| 1382.HK | Pacific Textiles Holdings Ltd | 0.7 | 0.64 | 0.4 |
| 294.HK | Yangtzekiang Garment Ltd | 0 | 0.1 | 0.1 |
| 321.HK | Texwinca Holdings Ltd | 1.1 | 0.52 | 0.27 |
| 3608.HK | Yongsheng Advanced Materials Company Ltd | 0.34 | 0.03 | 0.03 |
| 420.HK | Fountain Set Holdings Ltd | 0.23 | 0.22 | 0.19 |
| 600448.SS | Huafang Co Ltd | 0.77 | 1.35 | 0.81 |
| 601599.SS | Zhewen Pictures Group Co Ltd | 0.19 | 1.16 | 0.99 |
| Low | High | |
| Unlevered beta | 0.24 | 0.57 |
| Relevered beta | 1.58 | 3.75 |
| Adjusted relevered beta | 1.39 | 2.84 |
2307.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 2307.HK:
cost_of_equity (17.45%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (1.39) + 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.