300540.SZ WACC - Weighted Average Cost of Capital
The WACC of Chengdu Shenleng Liquefaction Plant Co Ltd (300540.SZ) is 9.5%.
| Range | Selected | |
| Cost of equity | 8.8% - 11.1% | 9.95% |
| Tax rate | 5.0% - 7.4% | 6.2% |
| Cost of debt | 5.0% - 5.0% | 5% |
| WACC | 8.5% - 10.6% | 9.5% |
| Category | Low | High |
| Long-term bond rate | 2.7% | 3.2% |
| Equity market risk premium | 6.1% | 7.1% |
| Adjusted beta | 1 | 1.05 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 8.8% | 11.1% |
| Tax rate | 5.0% | 7.4% |
| Debt/Equity ratio | 0.09 | 0.09 |
| Cost of debt | 5.0% | 5.0% |
| After-tax WACC | 8.5% | 10.6% |
| Selected WACC | 9.5% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| 300540.SZ | Chengdu Shenleng Liquefaction Plant Co Ltd | 0.09 | 1.32 | 1.22 |
| 000595.SZ | Baota Industry Co Ltd | 0.08 | 0.85 | 0.8 |
| 002877.SZ | Wuxi Smart Auto-control Engineering Co Ltd | 0.3 | 1.21 | 0.94 |
| 002931.SZ | Zhejiang Fenglong Electric Co Ltd | 0.06 | 0.96 | 0.91 |
| 300780.SZ | Sichuan Dawn Precision Technology Co Ltd | 0.3 | 1.25 | 0.97 |
| 300823.SZ | Tjk Machinery Tianjin Co Ltd | 0.03 | 1.28 | 1.25 |
| 300838.SZ | Zhejiang Linuo Flow Control Technology Co Ltd | 0.11 | 1.13 | 1.02 |
| 603488.SS | Flying Technology Co Ltd | 0.11 | 1.1 | 1 |
| 603656.SS | Hefei Taihe Intelligent Technology Group Co Ltd | 0.01 | 0.84 | 0.83 |
| 603895.SS | Shanghai Tianyong Engineering Co Ltd | 0.18 | 0.93 | 0.79 |
| Low | High | |
| Unlevered beta | 0.92 | 0.98 |
| Relevered beta | 1 | 1.07 |
| Adjusted relevered beta | 1 | 1.05 |
300540.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 300540.SZ:
cost_of_equity (9.95%) = 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.