The WACC of Guangzhou Wondfo Biotech Co Ltd (300482.SZ) is 10.4%.
Range | Selected | |
Cost of equity | 8.8% - 12.7% | 10.75% |
Tax rate | 10.1% - 11.2% | 10.65% |
Cost of debt | 5.0% - 5.0% | 5% |
WACC | 8.6% - 12.3% | 10.4% |
Category | Low | High |
Long-term bond rate | 2.7% | 3.2% |
Equity market risk premium | 6.1% | 7.1% |
Adjusted beta | 1 | 1.27 |
Additional risk adjustments | 0.0% | 0.5% |
Cost of equity | 8.8% | 12.7% |
Tax rate | 10.1% | 11.2% |
Debt/Equity ratio | 0.06 | 0.06 |
Cost of debt | 5.0% | 5.0% |
After-tax WACC | 8.6% | 12.3% |
Selected WACC | 10.4% | |
Debt/Equity | Unlevered | |||
Peers | Company Name | ratio | Beta | beta |
300482.SZ | Guangzhou Wondfo Biotech Co Ltd | 0.06 | 1.58 | 1.51 |
002223.SZ | Jiangsu Yuyue Medical Equipment & Supply Co Ltd | 0.01 | 0.99 | 0.98 |
002901.SZ | Double Medical Technology Inc | 0.02 | 0.94 | 0.92 |
1302.HK | LifeTech Scientific Corp | 0.07 | 0.92 | 0.86 |
2500.HK | Venus Medtech Hangzhou Inc | 0.34 | 0.1 | 0.08 |
300171.SZ | Shanghai Tofflon Science and Technology Co Ltd | 0.01 | 1.82 | 1.8 |
300298.SZ | Sinocare Inc | 0.07 | 1.39 | 1.31 |
300869.SZ | Contec Medical Systems Co Ltd | 0.13 | 1.52 | 1.36 |
688139.SS | Qingdao Haier Biomedical Co Ltd | 0.01 | 1.62 | 1.6 |
688617.SS | APT Medical Inc | 0 | 0.57 | 0.57 |
Low | High | |
Unlevered beta | 0.96 | 1.33 |
Relevered beta | 1 | 1.4 |
Adjusted relevered beta | 1 | 1.27 |
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 300482.SZ:
cost_of_equity (10.75%) = risk_free_rate (2.95%) + equity_risk_premium (6.60%) * adjusted_beta (1) + 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.