2738.HK WACC - Weighted Average Cost of Capital

The WACC of Huajin International Holdings Ltd (2738.HK) is 7.6%.

The Cost of Equity of Huajin International Holdings Ltd (2738.HK) is 37.25%.

The Cost of Debt of Huajin International Holdings Ltd (2738.HK) is 6.70%.

	Range	Selected
Cost of equity	27.20% - 47.30%	37.25%
Tax rate	16.00% - 17.60%	16.80%
Cost of debt	6.40% - 7.00%	6.70%
WACC	6.8% - 8.5%	7.6%

WACC

2738.HK WACC calculation

Category	Low	High

Long-term bond rate	2.9%	3.4%
Equity market risk premium	6.0%	7.0%
Adjusted beta	4.07	6.22

Additional risk adjustments	0.0%	0.5%
Cost of equity	27.20%	47.30%

Tax rate	16.00%	17.60%
Debt/Equity ratio	14.37	14.37
Cost of debt	6.40%	7.00%

After-tax WACC	6.8%	8.5%


Selected WACC	7.6%

2738.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 2738.HK:

cost_of_equity (37.25%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (4.07) + 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.