301.HK WACC - Weighted Average Cost of Capital

The WACC of Sanvo Fine Chemicals Group Ltd (301.HK) is 6.9%.

The Cost of Equity of Sanvo Fine Chemicals Group Ltd (301.HK) is 8.10%.

The Cost of Debt of Sanvo Fine Chemicals Group Ltd (301.HK) is 6.45%.

	Range	Selected
Cost of equity	6.60% - 9.60%	8.10%
Tax rate	22.30% - 36.10%	29.20%
Cost of debt	5.90% - 7.00%	6.45%
WACC	5.9% - 7.9%	6.9%

WACC

301.HK WACC calculation

Category	Low	High

Long-term bond rate	2.9%	3.4%
Equity market risk premium	6.0%	7.0%
Adjusted beta	0.62	0.83

Additional risk adjustments	0.0%	0.5%
Cost of equity	6.60%	9.60%

Tax rate	22.30%	36.10%
Debt/Equity ratio	0.52	0.52
Cost of debt	5.90%	7.00%

After-tax WACC	5.9%	7.9%


Selected WACC	6.9%

301.HK'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 301.HK:

cost_of_equity (8.10%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (0.62) + 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.