300865.SZ WACC - Weighted Average Cost of Capital
The WACC of Chengdu Dahongli Machinery Co Ltd (300865.SZ) is 9.6%.
| Range | Selected | |
| Cost of equity | 8.2% - 11.1% | 9.65% |
| Tax rate | 13.5% - 16.6% | 15.05% |
| Cost of debt | 5.0% - 5.0% | 5% |
| WACC | 8.2% - 11.0% | 9.6% |
| Category | Low | High |
| Long-term bond rate | 2.7% | 3.2% |
| Equity market risk premium | 6.1% | 7.1% |
| Adjusted beta | 0.91 | 1.04 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 8.2% | 11.1% |
| Tax rate | 13.5% | 16.6% |
| Debt/Equity ratio | 0.01 | 0.01 |
| Cost of debt | 5.0% | 5.0% |
| After-tax WACC | 8.2% | 11.0% |
| Selected WACC | 9.6% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| 300865.SZ | Chengdu Dahongli Machinery Co Ltd | 0.01 | 1.68 | 1.66 |
| 002480.SZ | Chengdu Xinzhu Road&Bridge Machinery Co Ltd | 1.83 | 0.44 | 0.17 |
| 1301.HK | D&G Technology Holding Co Ltd | 0 | 0.31 | 0.31 |
| 1596.HK | Hebei Yichen Industrial Group Corp Ltd | 0.34 | -0.14 | -0.11 |
| 300210.SZ | Anshan Senyuan Road & Bridge Co Ltd | 0.07 | 1.81 | 1.71 |
| 300589.SZ | Jianglong Shipbuilding Co Ltd | 0.08 | 1.13 | 1.06 |
| 300818.SZ | Jiangxi Naipu Mining Machinery and New Materials Co Ltd | 0.17 | 1.16 | 1.01 |
| 300923.SZ | Yeal Electric Co Ltd | 0.01 | 1.06 | 1.05 |
| 600495.SS | Jinxi Axle Co Ltd | 0.05 | 0.65 | 0.62 |
| 603500.SS | Zhejiang Tiantai Xianghe Industrial Co Ltd | 0.09 | 1.22 | 1.14 |
| Low | High | |
| Unlevered beta | 0.86 | 1.05 |
| Relevered beta | 0.87 | 1.06 |
| Adjusted relevered beta | 0.91 | 1.04 |
300865.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 300865.SZ:
cost_of_equity (9.65%) = risk_free_rate (2.95%) + equity_risk_premium (6.60%) * adjusted_beta (0.91) + 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.