2623.HK WACC - Weighted Average Cost of Capital

The WACC of Add New Energy Investment Holdings Group Ltd (2623.HK) is 9.8%.

The Cost of Equity of Add New Energy Investment Holdings Group Ltd (2623.HK) is 19.60%.

The Cost of Debt of Add New Energy Investment Holdings Group Ltd (2623.HK) is 4.25%.

	Range	Selected
Cost of equity	16.70% - 22.50%	19.60%
Tax rate	4.20% - 7.20%	5.70%
Cost of debt	4.00% - 4.50%	4.25%
WACC	8.6% - 10.9%	9.8%

WACC

2623.HK WACC calculation

Category	Low	High

Long-term bond rate	2.9%	3.4%
Equity market risk premium	6.0%	7.0%
Adjusted beta	2.32	2.66

Additional risk adjustments	0.0%	0.5%
Cost of equity	16.70%	22.50%

Tax rate	4.20%	7.20%
Debt/Equity ratio	1.71	1.71
Cost of debt	4.00%	4.50%

After-tax WACC	8.6%	10.9%


Selected WACC	9.8%

2623.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 2623.HK:

cost_of_equity (19.60%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (2.32) + 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.