The WACC of China Power International Development Ltd (2380.HK) is 4.3%.
Range | Selected | |
Cost of equity | 8.5% - 11.0% | 9.75% |
Tax rate | 19.2% - 21.2% | 20.2% |
Cost of debt | 4.0% - 4.5% | 4.25% |
WACC | 4.0% - 4.6% | 4.3% |
Category | Low | High |
Long-term bond rate | 2.9% | 3.4% |
Equity market risk premium | 6.0% | 7.0% |
Adjusted beta | 0.94 | 1.02 |
Additional risk adjustments | 0.0% | 0.5% |
Cost of equity | 8.5% | 11.0% |
Tax rate | 19.2% | 21.2% |
Debt/Equity ratio | 5.75 | 5.75 |
Cost of debt | 4.0% | 4.5% |
After-tax WACC | 4.0% | 4.6% |
Selected WACC | 4.3% | |
Debt/Equity | Unlevered | |||
Peers | Company Name | ratio | Beta | beta |
2380.HK | China Power International Development Ltd | 5.75 | 0.4 | 0.07 |
000539.SZ | Guangdong Electric Power Development Co Ltd | 4.67 | 0.89 | 0.19 |
1811.HK | CGN New Energy Holdings Co Ltd | 4.63 | 0.76 | 0.16 |
600098.SS | Guangzhou Development Group Inc | 1.61 | 0.87 | 0.38 |
600642.SS | Shenergy Co Ltd | 1.07 | 0.63 | 0.34 |
600886.SS | SDIC Power Holdings Co Ltd | 1.43 | 0.38 | 0.18 |
836.HK | China Resources Power Holdings Co Ltd | 1.97 | 0.52 | 0.2 |
9513.T | Electric Power Development Co Ltd | 4.05 | 0.46 | 0.11 |
OGKB.ME | OGK-2 PAO | 0.62 | 0.24 | 0.16 |
TNSE.ME | GK TNS Energo PAO | 0.15 | -0.13 | -0.11 |
Low | High | |
Unlevered beta | 0.16 | 0.18 |
Relevered beta | 0.91 | 1.03 |
Adjusted relevered beta | 0.94 | 1.02 |
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 2380.HK:
cost_of_equity (9.75%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (0.94) + 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.