3690.HK WACC - Weighted Average Cost of Capital
The WACC of Meituan (3690.HK) is 9.1%.
| Range | Selected | |
| Cost of equity | 6.8% - 12.3% | 9.55% |
| Tax rate | 1.1% - 3.0% | 2.05% |
| Cost of debt | 4.0% - 4.5% | 4.25% |
| WACC | 6.5% - 11.7% | 9.1% |
| Category | Low | High |
| Long-term bond rate | 2.9% | 3.4% |
| Equity market risk premium | 6.0% | 7.0% |
| Adjusted beta | 0.65 | 1.21 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 6.8% | 12.3% |
| Tax rate | 1.1% | 3.0% |
| Debt/Equity ratio | 0.09 | 0.09 |
| Cost of debt | 4.0% | 4.5% |
| After-tax WACC | 6.5% | 11.7% |
| Selected WACC | 9.1% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| 3690.HK | Meituan | 0.09 | 1.58 | 1.45 |
| 002280.SZ | Hangzhou Liaison Interactive Information Technology Co Ltd | 5.19 | 1.82 | 0.3 |
| 002640.SZ | Global Top E-Commerce Co Ltd | 0.11 | 1.95 | 1.76 |
| 136.HK | HengTen Networks Group Ltd | 0.04 | 0.34 | 0.32 |
| 1896.HK | Maoyan Entertainment | 0.06 | 1.19 | 1.12 |
| 2101.HK | Fulu Holdings Ltd | 0.32 | 0.16 | 0.12 |
| 3092.T | ZOZO Inc | 0.01 | 0.45 | 0.44 |
| 4385.T | Mercari Inc | 0.48 | 0.66 | 0.45 |
| 605136.SS | Shanghai Lili & Beauty Cosmetics Co Ltd | 0.02 | 1.36 | 1.33 |
| 9618.HK | JD.Com Inc | 0.18 | 1.58 | 1.35 |
| Low | High | |
| Unlevered beta | 0.44 | 1.2 |
| Relevered beta | 0.48 | 1.31 |
| Adjusted relevered beta | 0.65 | 1.21 |
3690.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 3690.HK:
cost_of_equity (9.55%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (0.65) + 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.