300691.SZ WACC - Weighted Average Cost of Capital
The WACC of Union Optech Co Ltd (300691.SZ) is 9.7%.
| Range | Selected | |
| Cost of equity | 8.8% - 12.3% | 10.55% |
| Tax rate | 10.2% - 12.9% | 11.55% |
| Cost of debt | 5.0% - 5.0% | 5% |
| WACC | 8.2% - 11.2% | 9.7% |
| Category | Low | High |
| Long-term bond rate | 2.7% | 3.2% |
| Equity market risk premium | 6.1% | 7.1% |
| Adjusted beta | 1 | 1.22 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 8.8% | 12.3% |
| Tax rate | 10.2% | 12.9% |
| Debt/Equity ratio | 0.16 | 0.16 |
| Cost of debt | 5.0% | 5.0% |
| After-tax WACC | 8.2% | 11.2% |
| Selected WACC | 9.7% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| 300691.SZ | Union Optech Co Ltd | 0.16 | 1.54 | 1.35 |
| 000020.SZ | Shenzhen Zhongheng Huafa Co Ltd | 0.04 | 0.89 | 0.87 |
| 002057.SZ | Sinosteel New Materials Co Ltd | 0.16 | 0.98 | 0.86 |
| 002885.SZ | Shenzhen JingQuanHua Electronics Co Ltd | 0.18 | 0.9 | 0.77 |
| 002902.SZ | Dongguan Mentech Optical & Magnetic Co Ltd | 0.2 | 1.41 | 1.2 |
| 300283.SZ | Wenzhou Hongfeng Electrical Alloy Co Ltd | 0.56 | 1.33 | 0.89 |
| 300543.SZ | Shenzhen Longood Intelligent Electric Co Ltd | 0.15 | 1.73 | 1.53 |
| 600353.SS | Chengdu Xuguang Electronics Co Ltd | 0.04 | 1.17 | 1.13 |
| 603829.SS | Jiangsu Luokai Mechanical & Electrical Co Ltd | 0.3 | 0.78 | 0.61 |
| 605218.SS | Ways Electron Co Ltd | 0.06 | 1.49 | 1.41 |
| Low | High | |
| Unlevered beta | 0.88 | 1.16 |
| Relevered beta | 1 | 1.33 |
| Adjusted relevered beta | 1 | 1.22 |
300691.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 300691.SZ:
cost_of_equity (10.55%) = 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.