The WACC of Jinlei Technology Co Ltd (300443.SZ) is 8.7%.
Range | Selected | |
Cost of equity | 7.4% - 10.0% | 8.7% |
Tax rate | 8.9% - 11.6% | 10.25% |
Cost of debt | 5.0% - 5.0% | 5% |
WACC | 7.4% - 9.9% | 8.7% |
Category | Low | High |
Long-term bond rate | 2.7% | 3.2% |
Equity market risk premium | 6.1% | 7.1% |
Adjusted beta | 0.77 | 0.88 |
Additional risk adjustments | 0.0% | 0.5% |
Cost of equity | 7.4% | 10.0% |
Tax rate | 8.9% | 11.6% |
Debt/Equity ratio | 0.01 | 0.01 |
Cost of debt | 5.0% | 5.0% |
After-tax WACC | 7.4% | 9.9% |
Selected WACC | 8.7% | |
Debt/Equity | Unlevered | |||
Peers | Company Name | ratio | Beta | beta |
300443.SZ | Jinlei Technology Co Ltd | 0.01 | 1.37 | 1.36 |
002112.SZ | San Bian Science& Technology Co Ltd | 0.27 | 0.63 | 0.51 |
002169.SZ | Guangzhou Zhiguang Electric Co Ltd | 0.58 | 1.41 | 0.93 |
002487.SZ | Dajin Heavy Industry Corp | 0.09 | 1.06 | 0.98 |
300129.SZ | Shanghai Taisheng Wind Power Equipment Co Ltd | 0.5 | 1.08 | 0.74 |
300222.SZ | Csg Smart Science&Technology Co Ltd | 0.13 | 1.19 | 1.06 |
300569.SZ | Qingdao Tianneng Heavy Industries Co Ltd | 0.95 | 1.32 | 0.71 |
600192.SS | Lanzhou Greatwall Electrical Co Ltd | 0.68 | 0.94 | 0.58 |
600290.SS | Huayi Electric Co Ltd | 2.42 | 1.46 | 0.46 |
600550.SS | Baoding Tianwei Baobian Electric Co Ltd | 0.17 | -0.53 | -0.46 |
Low | High | |
Unlevered beta | 0.66 | 0.82 |
Relevered beta | 0.66 | 0.82 |
Adjusted relevered beta | 0.77 | 0.88 |
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 300443.SZ:
cost_of_equity (8.70%) = risk_free_rate (2.95%) + equity_risk_premium (6.60%) * adjusted_beta (0.77) + 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.