2488.HK WACC - Weighted Average Cost of Capital
The WACC of Launch Tech Co Ltd (2488.HK) is 9.3%.
| Range | Selected | |
| Cost of equity | 9.4% - 12.4% | 10.9% |
| Tax rate | 3.3% - 5.2% | 4.25% |
| Cost of debt | 5.0% - 5.0% | 5% |
| WACC | 8.2% - 10.4% | 9.3% |
| Category | Low | High |
| Long-term bond rate | 3.0% | 3.5% |
| Equity market risk premium | 5.3% | 6.3% |
| Adjusted beta | 1.19 | 1.31 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 9.4% | 12.4% |
| Tax rate | 3.3% | 5.2% |
| Debt/Equity ratio | 0.34 | 0.34 |
| Cost of debt | 5.0% | 5.0% |
| After-tax WACC | 8.2% | 10.4% |
| Selected WACC | 9.3% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| 2488.HK | Launch Tech Co Ltd | 0.35 | 0.23 | 0.17 |
| 300694.SZ | Wuxi Lihu Corporation Limited | 0.15 | 0.97 | 0.85 |
| 600148.SS | Changchun Yidong Clutch Co Ltd | 0.07 | 0.49 | 0.46 |
| 603006.SS | Shanghai Lianming Machinery Co Ltd | 0.02 | 1.47 | 1.44 |
| 603009.SS | Shanghai Beite Technology Co Ltd | 0.06 | 1.13 | 1.07 |
| 603089.SS | ADD Industry Zhejiang Co Ltd | 0.44 | 1.05 | 0.74 |
| 603178.SS | Ningbo Shenglong Automotive Powertrain System Co Ltd | 0.11 | 1.43 | 1.3 |
| 603335.SS | Guangdong Dcenti Auto-Parts Stock Ltd Co | 0.29 | 1.29 | 1.01 |
| 603767.SS | Zhejiang Zomax Transmission Co Ltd | 0.93 | 1.29 | 0.68 |
| 605128.SS | Shanghai Yanpu Metal Products Co Ltd | 0.09 | 1.15 | 1.06 |
| Low | High | |
| Unlevered beta | 0.81 | 1.03 |
| Relevered beta | 1.28 | 1.46 |
| Adjusted relevered beta | 1.19 | 1.31 |
2488.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 2488.HK:
cost_of_equity (10.90%) = risk_free_rate (3.25%) + equity_risk_premium (5.80%) * adjusted_beta (1.19) + 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.