300616.SZ WACC - Weighted Average Cost of Capital
The WACC of Guangzhou Shangpin Home Collection Co Ltd (300616.SZ) is 7.2%.
| Range | Selected | |
| Cost of equity | 7.7% - 13.7% | 10.7% |
| Tax rate | 14.0% - 31.7% | 22.85% |
| Cost of debt | 5.0% - 5.0% | 5% |
| WACC | 5.9% - 8.4% | 7.2% |
| Category | Low | High |
| Long-term bond rate | 2.7% | 3.2% |
| Equity market risk premium | 6.1% | 7.1% |
| Adjusted beta | 0.82 | 1.4 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 7.7% | 13.7% |
| Tax rate | 14.0% | 31.7% |
| Debt/Equity ratio | 1.07 | 1.07 |
| Cost of debt | 5.0% | 5.0% |
| After-tax WACC | 5.9% | 8.4% |
| Selected WACC | 7.2% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| 300616.SZ | Guangzhou Shangpin Home Collection Co Ltd | 1.07 | 2.73 | 1.46 |
| 1575.HK | Morris Holdings Ltd | 1.57 | 0.33 | 0.14 |
| 2127.HK | Huisen Household International Group Ltd | 9.01 | 1.01 | 0.12 |
| 603008.SS | Xilinmen Furniture Co Ltd | 0.44 | 1.48 | 1.09 |
| 603180.SS | GoldenHome Living Co Ltd | 0.59 | 1.34 | 0.9 |
| 603313.SS | Healthcare Co Ltd | 0.82 | 1.39 | 0.83 |
| 603610.SS | Keeson Technology Corp Ltd | 0.17 | 1.64 | 1.44 |
| 603709.SS | Zoy Home Furnishing Co Ltd | 0.37 | 0.66 | 0.5 |
| 603818.SS | QuMei Home Furnishings Group Co Ltd | 1.23 | 1.78 | 0.89 |
| 605318.SS | Fsilon Furnishing and Construction Materials Corp | 0.06 | 0.22 | 0.21 |
| 8101.HK | EJE Hong Kong Holdings Ltd | 4.47 | 1 | 0.22 |
| Low | High | |
| Unlevered beta | 0.5 | 0.89 |
| Relevered beta | 0.73 | 1.6 |
| Adjusted relevered beta | 0.82 | 1.4 |
300616.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 300616.SZ:
cost_of_equity (10.70%) = risk_free_rate (2.95%) + equity_risk_premium (6.60%) * adjusted_beta (0.82) + 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.