300471.SZ WACC - Weighted Average Cost of Capital
The WACC of Houpu Clean Energy Co Ltd (300471.SZ) is 8.5%.
| Range | Selected | |
| Cost of equity | 6.8% - 10.5% | 8.65% |
| Tax rate | 0.6% - 5.1% | 2.85% |
| Cost of debt | 5.0% - 5.0% | 5% |
| WACC | 6.7% - 10.3% | 8.5% |
| Category | Low | High |
| Long-term bond rate | 2.7% | 3.2% |
| Equity market risk premium | 6.1% | 7.1% |
| Adjusted beta | 0.67 | 0.96 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 6.8% | 10.5% |
| Tax rate | 0.6% | 5.1% |
| Debt/Equity ratio | 0.04 | 0.04 |
| Cost of debt | 5.0% | 5.0% |
| After-tax WACC | 6.7% | 10.3% |
| Selected WACC | 8.5% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| 300471.SZ | Houpu Clean Energy Co Ltd | 0.04 | 1.33 | 1.27 |
| 002278.SZ | Shanghai SK Petroleum & Chemical Equipment Corp Ltd | 0.06 | 0.77 | 0.73 |
| 1586.HK | China Leon Inspection Holding Ltd | 0.08 | -0.05 | -0.04 |
| 1623.HK | Hilong Holding Ltd | 15.51 | 0.62 | 0.04 |
| 1921.HK | Dalipal Holdings Ltd | 0.3 | 0.15 | 0.11 |
| 1938.HK | Chu Kong Petroleum and Natural Gas Steel Pipe Holdings Ltd | 9.4 | 0.28 | 0.03 |
| 300157.SZ | LandOcean Energy Services Co Ltd | 0.09 | 1.56 | 1.43 |
| 601798.SS | Lanpec Technologies Ltd | 0.14 | 1.05 | 0.92 |
| 603036.SS | Jiangsu Rutong Petro-Machinery Co Ltd | 0.01 | 0.89 | 0.88 |
| 688377.SS | Nanjing Develop Advanced Manufacturing Co Ltd | 0.11 | 1.74 | 1.56 |
| Low | High | |
| Unlevered beta | 0.48 | 0.9 |
| Relevered beta | 0.51 | 0.94 |
| Adjusted relevered beta | 0.67 | 0.96 |
300471.SZ'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 300471.SZ:
cost_of_equity (8.65%) = risk_free_rate (2.95%) + equity_risk_premium (6.60%) * adjusted_beta (0.67) + 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.