Category	Low	High

Long-term bond rate	2.9%	3.4%
Equity market risk premium	6.0%	7.0%
Adjusted beta	0.55	0.67

Additional risk adjustments	0.0%	0.5%
Cost of equity	6.2%	8.6%

Tax rate	8.5%	10.6%
Debt/Equity ratio	0.21	0.21
Cost of debt	8.1%	144.6%

After-tax WACC	6.4%	29.2%


Selected WACC	17.8%

265.HK WACC - Detailed calculations of Beta

		Debt/Equity		Unlevered
Peers	Company Name	ratio	Beta	beta

265.HK	Orient Victory Travel Group Company Ltd	0.21	0.51	0.43
104620.KQ	Yellow Balloon Tour Co Ltd	0.45	0.89	0.63
1235.HK	Travel Expert (Asia) Enterprises Ltd	0.18	0.21	0.18
201.HK	Magnificent Hotel Investments Ltd	1.12	0.7	0.35
219.HK	Shun Ho Property Investments Ltd	3.11	0.18	0.05
253.HK	Shun Ho Holdings Ltd	7.91	0.27	0.03
308.HK	China Travel International Investment Hong Kong Ltd	0.38	0.75	0.56
487.HK	Success Universe Group Ltd	1.36	1.06	0.47
6882.HK	EGL Holdings Co Ltd	1.4	0.04	0.02
8069.HK	WWPKG Holdings Company Ltd	0.19	0.51	0.43

	Low	High

Unlevered beta	0.28	0.43
Relevered beta	0.33	0.51
Adjusted relevered beta	0.55	0.67

265.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 265.HK:

cost_of_equity (7.40%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (0.55) + 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.