2608.HK WACC - Weighted Average Cost of Capital

The WACC of Sunshine 100 China Holdings Ltd (2608.HK) is 5.9%.

The Cost of Equity of Sunshine 100 China Holdings Ltd (2608.HK) is 51.95%.

The Cost of Debt of Sunshine 100 China Holdings Ltd (2608.HK) is 6.60%.

	Range	Selected
Cost of equity	38.30% - 65.60%	51.95%
Tax rate	6.70% - 15.90%	11.30%
Cost of debt	6.20% - 7.00%	6.60%
WACC	5.8% - 5.9%	5.9%

WACC

2608.HK WACC calculation

Category	Low	High

Long-term bond rate	2.9%	3.4%
Equity market risk premium	6.0%	7.0%
Adjusted beta	5.93	8.85

Additional risk adjustments	0.0%	0.5%
Cost of equity	38.30%	65.60%

Tax rate	6.70%	15.90%
Debt/Equity ratio	1147.48	1147.48
Cost of debt	6.20%	7.00%

After-tax WACC	5.8%	5.9%


Selected WACC	5.9%

2608.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 2608.HK:

cost_of_equity (51.95%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (5.93) + 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.