3377.HK WACC - Weighted Average Cost of Capital

The WACC of Sino-Ocean Group Holding Ltd (3377.HK) is 4.6%.

The Cost of Equity of Sino-Ocean Group Holding Ltd (3377.HK) is 25.90%.

The Cost of Debt of Sino-Ocean Group Holding Ltd (3377.HK) is 5.65%.

	Range	Selected
Cost of equity	20.30% - 31.50%	25.90%
Tax rate	12.70% - 29.00%	20.85%
Cost of debt	4.30% - 7.00%	5.65%
WACC	4.0% - 5.3%	4.6%

WACC

3377.HK WACC calculation

Category	Low	High

Long-term bond rate	2.9%	3.4%
Equity market risk premium	6.0%	7.0%
Adjusted beta	2.91	3.96

Additional risk adjustments	0.0%	0.5%
Cost of equity	20.30%	31.50%

Tax rate	12.70%	29.00%
Debt/Equity ratio	77.97	77.97
Cost of debt	4.30%	7.00%

After-tax WACC	4.0%	5.3%


Selected WACC	4.6%

3377.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 3377.HK:

cost_of_equity (25.90%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (2.91) + 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.