The WACC of Uroica Precision Information Engineering Co Ltd (300099.SZ) is 10.1%.
Range | Selected | |
Cost of equity | 8.4% - 11.9% | 10.15% |
Tax rate | 9.7% - 11.3% | 10.5% |
Cost of debt | 5.0% - 5.0% | 5% |
WACC | 8.4% - 11.8% | 10.1% |
Category | Low | High |
Long-term bond rate | 2.7% | 3.2% |
Equity market risk premium | 6.1% | 7.1% |
Adjusted beta | 0.93 | 1.15 |
Additional risk adjustments | 0.0% | 0.5% |
Cost of equity | 8.4% | 11.9% |
Tax rate | 9.7% | 11.3% |
Debt/Equity ratio | 0 | 0 |
Cost of debt | 5.0% | 5.0% |
After-tax WACC | 8.4% | 11.8% |
Selected WACC | 10.1% | |
Debt/Equity | Unlevered | |||
Peers | Company Name | ratio | Beta | beta |
300099.SZ | Uroica Precision Information Engineering Co Ltd | 0 | 1.51 | 1.51 |
002480.SZ | Chengdu Xinzhu Road&Bridge Machinery Co Ltd | 1.95 | 0.45 | 0.16 |
1301.HK | D&G Technology Holding Co Ltd | 0 | 0.31 | 0.31 |
1596.HK | Hebei Yichen Industrial Group Corp Ltd | 0.33 | -0.11 | -0.08 |
300455.SZ | Beijing Ctrowell Technology Corp Ltd | 0.03 | 1.72 | 1.67 |
300589.SZ | Jianglong Shipbuilding Co Ltd | 0.08 | 1.15 | 1.07 |
300816.SZ | ActBlue Co Ltd | 0.31 | 1.63 | 1.28 |
300837.SZ | Zhejiang ZheKuang Heavy Industry Co Ltd | 0.18 | 1.37 | 1.18 |
600495.SS | Jinxi Axle Co Ltd | 0.05 | 0.65 | 0.62 |
688033.SS | Beijing Tianyishangjia New Material Corp Ltd | 0.4 | 1.89 | 1.39 |
Low | High | |
Unlevered beta | 0.89 | 1.22 |
Relevered beta | 0.9 | 1.22 |
Adjusted relevered beta | 0.93 | 1.15 |
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 300099.SZ:
cost_of_equity (10.15%) = risk_free_rate (2.95%) + equity_risk_premium (6.60%) * adjusted_beta (0.93) + 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.