3626.HK WACC - Weighted Average Cost of Capital

The WACC of Hang Sang (Siu Po) International Holding Company Ltd (3626.HK) is 5.8%.

The Cost of Equity of Hang Sang (Siu Po) International Holding Company Ltd (3626.HK) is 5.75%.

The Cost of Debt of Hang Sang (Siu Po) International Holding Company Ltd (3626.HK) is 6.95%.

	Range	Selected
Cost of equity	4.90% - 6.60%	5.75%
Tax rate	4.10% - 4.80%	4.45%
Cost of debt	6.90% - 7.00%	6.95%
WACC	4.9% - 6.6%	5.8%

WACC

3626.HK WACC calculation

Category	Low	High

Long-term bond rate	2.9%	3.4%
Equity market risk premium	6.0%	7.0%
Adjusted beta	0.26	0.32

Additional risk adjustments	0.5%	1.0%
Cost of equity	4.90%	6.60%

Tax rate	4.10%	4.80%
Debt/Equity ratio	0.01	0.01
Cost of debt	6.90%	7.00%

After-tax WACC	4.9%	6.6%


Selected WACC	5.8%

3626.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 3626.HK:

cost_of_equity (5.75%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (0.26) + 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.