363.HK WACC - Weighted Average Cost of Capital

The WACC of Shanghai Industrial Holdings Ltd (363.HK) is 4.9%.

The Cost of Equity of Shanghai Industrial Holdings Ltd (363.HK) is 11.60%.

The Cost of Debt of Shanghai Industrial Holdings Ltd (363.HK) is 6.20%.

	Range	Selected
Cost of equity	8.40% - 14.80%	11.60%
Tax rate	41.80% - 45.30%	43.55%
Cost of debt	4.30% - 8.10%	6.20%
WACC	3.6% - 6.3%	4.9%

WACC

363.HK WACC calculation

Category	Low	High

Long-term bond rate	2.9%	3.4%
Equity market risk premium	6.0%	7.0%
Adjusted beta	0.92	1.56

Additional risk adjustments	0.0%	0.5%
Cost of equity	8.40%	14.80%

Tax rate	41.80%	45.30%
Debt/Equity ratio	4.51	4.51
Cost of debt	4.30%	8.10%

After-tax WACC	3.6%	6.3%


Selected WACC	4.9%

363.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 363.HK:

cost_of_equity (11.60%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (0.92) + 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.