The WACC of Sino-I Technology Ltd (250.HK) is 7.5%.
Range | Selected | |
Cost of equity | 6.5% - 8.6% | 7.55% |
Tax rate | 4.4% - 9.1% | 6.75% |
Cost of debt | 7.0% - 8.6% | 7.8% |
WACC | 6.5% - 8.4% | 7.5% |
Category | Low | High |
Long-term bond rate | 2.9% | 3.4% |
Equity market risk premium | 6.0% | 7.0% |
Adjusted beta | 0.61 | 0.67 |
Additional risk adjustments | 0.0% | 0.5% |
Cost of equity | 6.5% | 8.6% |
Tax rate | 4.4% | 9.1% |
Debt/Equity ratio | 0.37 | 0.37 |
Cost of debt | 7.0% | 8.6% |
After-tax WACC | 6.5% | 8.4% |
Selected WACC | 7.5% | |
Debt/Equity | Unlevered | |||
Peers | Company Name | ratio | Beta | beta |
250.HK | Sino-I Technology Ltd | 0.37 | 0.31 | 0.23 |
1037.HK | Maxnerva Technology Services Ltd | 0.05 | 0.39 | 0.37 |
1460.HK | ICO Group Ltd | 0.2 | 0.46 | 0.39 |
1985.HK | Microware Group Ltd | 0.04 | 0.03 | 0.03 |
300051.SZ | Xiamen 35.com Technology Co Ltd | 0.44 | 1.51 | 1.07 |
3915.T | TerraSky Co Ltd | 0.01 | 1.38 | 1.37 |
46.HK | Computer and Technologies Holdings Ltd | 0.05 | 0.37 | 0.35 |
8081.HK | Hang Tai Yue Group Holdings Ltd | 0.49 | 0.18 | 0.12 |
8319.HK | Expert Systems Holdings Ltd | 0.88 | -0.08 | -0.04 |
INET.BK | Internet Thailand PCL | 0.47 | 0.95 | 0.65 |
Low | High | |
Unlevered beta | 0.3 | 0.38 |
Relevered beta | 0.42 | 0.51 |
Adjusted relevered beta | 0.61 | 0.67 |
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 250.HK:
cost_of_equity (7.55%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (0.61) + 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.