The WACC of NanJing Sanchao Advanced Materials Co Ltd (300554.SZ) is 10.7%.
Range | Selected | |
Cost of equity | 9.2% - 13.1% | 11.15% |
Tax rate | 13.5% - 18.5% | 16% |
Cost of debt | 5.0% - 5.0% | 5% |
WACC | 8.9% - 12.6% | 10.7% |
Category | Low | High |
Long-term bond rate | 2.7% | 3.2% |
Equity market risk premium | 6.1% | 7.1% |
Adjusted beta | 1.06 | 1.32 |
Additional risk adjustments | 0.0% | 0.5% |
Cost of equity | 9.2% | 13.1% |
Tax rate | 13.5% | 18.5% |
Debt/Equity ratio | 0.06 | 0.06 |
Cost of debt | 5.0% | 5.0% |
After-tax WACC | 8.9% | 12.6% |
Selected WACC | 10.7% | |
Debt/Equity | Unlevered | |||
Peers | Company Name | ratio | Beta | beta |
300554.SZ | NanJing Sanchao Advanced Materials Co Ltd | 0.06 | 1.68 | 1.6 |
002119.SZ | Ningbo Kangqiang Electronics Co Ltd | 0.13 | 1.14 | 1.03 |
144960.KQ | New Power Plasma Co Ltd | 0.96 | 1.27 | 0.71 |
187870.KQ | Device ENG Co Ltd | 0.24 | 0.59 | 0.5 |
300812.SZ | Shenzhen Etmade Automatic Equipment Co Ltd | 0.08 | 1.62 | 1.52 |
603396.SS | Yingkou Jinchen Machinery Co Ltd | 0.23 | 1.59 | 1.34 |
605358.SS | Hangzhou Lion Electronics Co Ltd | 0.6 | 1.58 | 1.05 |
688556.SS | Qingdao Gaoce Technology Co Ltd | 0.43 | 2.06 | 1.51 |
688596.SS | Shanghai GenTech Co Ltd | 0.15 | 1.72 | 1.53 |
968.HK | Xinyi Solar Holdings Ltd | 0.47 | 1.23 | 0.88 |
Low | High | |
Unlevered beta | 1.04 | 1.41 |
Relevered beta | 1.09 | 1.48 |
Adjusted relevered beta | 1.06 | 1.32 |
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 300554.SZ:
cost_of_equity (11.15%) = risk_free_rate (2.95%) + equity_risk_premium (6.60%) * adjusted_beta (1.06) + 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.