3800.HK WACC - Weighted Average Cost of Capital

The WACC of GCL-Poly Energy Holdings Ltd (3800.HK) is 8.4%.

The Cost of Equity of GCL-Poly Energy Holdings Ltd (3800.HK) is 11.00%.

The Cost of Debt of GCL-Poly Energy Holdings Ltd (3800.HK) is 6.05%.

	Range	Selected
Cost of equity	9.50% - 12.50%	11.00%
Tax rate	9.20% - 9.80%	9.50%
Cost of debt	5.10% - 7.00%	6.05%
WACC	7.3% - 9.6%	8.4%

WACC

3800.HK WACC calculation

Category	Low	High

Long-term bond rate	2.9%	3.4%
Equity market risk premium	6.0%	7.0%
Adjusted beta	1.1	1.23

Additional risk adjustments	0.0%	0.5%
Cost of equity	9.50%	12.50%

Tax rate	9.20%	9.80%
Debt/Equity ratio	0.85	0.85
Cost of debt	5.10%	7.00%

After-tax WACC	7.3%	9.6%


Selected WACC	8.4%

3800.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 3800.HK:

cost_of_equity (11.00%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (1.1) + 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.