The WACC of China Success Finance Group Holdings Ltd (3623.HK) is 6.0%.
Range | Selected | |
Cost of equity | 5.4% - 7.1% | 6.25% |
Tax rate | 5.4% - 14.9% | 10.15% |
Cost of debt | 4.6% - 7.0% | 5.8% |
WACC | 5.2% - 6.8% | 6.0% |
Category | Low | High |
Long-term bond rate | 2.9% | 3.4% |
Equity market risk premium | 6.0% | 7.0% |
Adjusted beta | 0.35 | 0.38 |
Additional risk adjustments | 0.5% | 1.0% |
Cost of equity | 5.4% | 7.1% |
Tax rate | 5.4% | 14.9% |
Debt/Equity ratio | 0.31 | 0.31 |
Cost of debt | 4.6% | 7.0% |
After-tax WACC | 5.2% | 6.8% |
Selected WACC | 6.0% | |
Debt/Equity | Unlevered | |||
Peers | Company Name | ratio | Beta | beta |
3623.HK | China Success Finance Group Holdings Ltd | 0.31 | 0.47 | 0.37 |
3360.HK | Far East Horizon Ltd | 11.26 | 0.47 | 0.04 |
379.HK | China Ever Grand Financial Leasing Group Co Ltd | 0.1 | 1 | 0.91 |
3848.HK | Wealthy Way Group Ltd | 0.1 | 0.88 | 0.81 |
508.HK | Dingyi Group Investment Ltd | 3.35 | 0.4 | 0.1 |
511724.BO | Baid Leasing and Finance Co Ltd | 0.44 | 0.07 | 0.05 |
512381.BO | Starteck Finance Ltd | 4.97 | -0.93 | -0.17 |
535566.BO | KIFS Financial Services Ltd | 2.12 | 0.01 | 0 |
629.HK | Yue Da International Holdings Ltd | 0.33 | -0.06 | -0.05 |
8525.HK | Baiying Holdings Group Ltd | 0.6 | -0.3 | -0.19 |
Low | High | |
Unlevered beta | 0.03 | 0.07 |
Relevered beta | 0.03 | 0.07 |
Adjusted relevered beta | 0.35 | 0.38 |
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 3623.HK:
cost_of_equity (6.25%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (0.35) + risk_adjustments (0.75%)
We include the risk adjustments, which range from 0% to 1%, to keep our WACC conservatives, especially for companies traded in developing markets.