300585.SZ WACC - Weighted Average Cost of Capital
The WACC of NanJing AoLian AE&EA Co Ltd (300585.SZ) is 9.8%.
| Range | Selected | |
| Cost of equity | 8.0% - 11.9% | 9.95% |
| Tax rate | 15.2% - 19.5% | 17.35% |
| Cost of debt | 5.0% - 5.0% | 5% |
| WACC | 7.9% - 11.7% | 9.8% |
| Category | Low | High |
| Long-term bond rate | 2.7% | 3.2% |
| Equity market risk premium | 6.1% | 7.1% |
| Adjusted beta | 0.86 | 1.15 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 8.0% | 11.9% |
| Tax rate | 15.2% | 19.5% |
| Debt/Equity ratio | 0.02 | 0.02 |
| Cost of debt | 5.0% | 5.0% |
| After-tax WACC | 7.9% | 11.7% |
| Selected WACC | 9.8% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| 300585.SZ | NanJing AoLian AE&EA Co Ltd | 0.02 | 1.57 | 1.54 |
| 000622.SZ | Hengli Industrial Development Group Co Ltd | 0.07 | 0.51 | 0.48 |
| 002265.SZ | Yunnan Xiyi Industrial Co Ltd | 0.09 | 0.92 | 0.85 |
| 002715.SZ | Huaiji Dengyun Auto-parts Holding Co Ltd | 0.13 | 1.26 | 1.14 |
| 2025.HK | Ruifeng Power Group Company Ltd | 0.14 | 0.14 | 0.12 |
| 300643.SZ | Hamaton Automotive Technology Co Ltd | 0.02 | 1.78 | 1.76 |
| 300652.SZ | Hang Zhou Radical Energy-Saving Technology Co Ltd | 0.02 | 1.75 | 1.72 |
| 300742.SZ | Nanjing YueBoo Power System Co Ltd | 41.71 | 1.41 | 0.04 |
| 600698.SS | Hunan Tyen Machinery Co Ltd | 0 | 0.67 | 0.67 |
| 605255.SS | Ningbo Tip Rubber Technology Co Ltd | 0 | 1.31 | 1.31 |
| Low | High | |
| Unlevered beta | 0.78 | 1.21 |
| Relevered beta | 0.79 | 1.22 |
| Adjusted relevered beta | 0.86 | 1.15 |
300585.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 300585.SZ:
cost_of_equity (9.95%) = risk_free_rate (2.95%) + equity_risk_premium (6.60%) * adjusted_beta (0.86) + 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.