The WACC of EVOC Intelligent Technology Co Ltd (2308.HK) is 9.7%.
Range | Selected | |
Cost of equity | 14.3% - 19.3% | 16.8% |
Tax rate | 16.0% - 19.4% | 17.7% |
Cost of debt | 6.1% - 8.1% | 7.1% |
WACC | 8.4% - 11.1% | 9.7% |
Category | Low | High |
Long-term bond rate | 2.9% | 3.4% |
Equity market risk premium | 6.0% | 7.0% |
Adjusted beta | 1.92 | 2.22 |
Additional risk adjustments | 0.0% | 0.5% |
Cost of equity | 14.3% | 19.3% |
Tax rate | 16.0% | 19.4% |
Debt/Equity ratio | 1.82 | 1.82 |
Cost of debt | 6.1% | 8.1% |
After-tax WACC | 8.4% | 11.1% |
Selected WACC | 9.7% | |
Debt/Equity | Unlevered | |||
Peers | Company Name | ratio | Beta | beta |
2308.HK | EVOC Intelligent Technology Co Ltd | 1.82 | 0.43 | 0.17 |
002017.SZ | Eastcompeace Technology Co Ltd | 0.02 | 0.92 | 0.9 |
002952.SZ | Yes Optoelectronics Group Co Ltd | 0 | 1.54 | 1.54 |
2369.HK | Coolpad Group Ltd | 3.75 | 0.56 | 0.14 |
300042.SZ | Netac Technology Co Ltd | 0.02 | 1.76 | 1.73 |
300205.SZ | Wuhan Tianyu Information Industry Co Ltd | 0.04 | 1 | 0.97 |
300787.SZ | Anfu CE LINK Ltd | 0.29 | 1.4 | 1.12 |
300868.SZ | Shenzhen Jame Technology Corp Ltd | 0.08 | 1.65 | 1.55 |
600130.SS | NINGBO BIRD Co Ltd | 0 | 1.11 | 1.11 |
6133.HK | Vital Innovations Holdings Ltd | 0.14 | 0.16 | 0.14 |
Low | High | |
Unlevered beta | 0.94 | 1.11 |
Relevered beta | 2.37 | 2.82 |
Adjusted relevered beta | 1.92 | 2.22 |
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 2308.HK:
cost_of_equity (16.80%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (1.92) + 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.