396.HK WACC - Weighted Average Cost of Capital
The WACC of Hing Lee (Hk) Holdings Ltd (396.HK) is 7.3%.
| Range | Selected | |
| Cost of equity | 5.3% - 9.5% | 7.4% |
| Tax rate | 22.1% - 22.3% | 22.2% |
| Cost of debt | 5.4% - 8.1% | 6.75% |
| WACC | 5.2% - 9.4% | 7.3% |
| Category | Low | High |
| Long-term bond rate | 2.9% | 3.4% |
| Equity market risk premium | 6.0% | 7.0% |
| Adjusted beta | 0.4 | 0.81 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 5.3% | 9.5% |
| Tax rate | 22.1% | 22.3% |
| Debt/Equity ratio | 0.03 | 0.03 |
| Cost of debt | 5.4% | 8.1% |
| After-tax WACC | 5.2% | 9.4% |
| Selected WACC | 7.3% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| 396.HK | Hing Lee (Hk) Holdings Ltd | 0.03 | -0.34 | -0.33 |
| 1198.HK | Royale Home Holdings Ltd | 3.76 | -0.05 | -0.01 |
| 1418.HK | Sinomax Group Ltd | 1.49 | 0.89 | 0.41 |
| 146.HK | Tai Ping Carpets International Ltd | 0.37 | 0.23 | 0.18 |
| 2223.HK | Casablanca Group Ltd | 0.39 | -0.43 | -0.33 |
| 464.HK | China Overseas Nuoxin International Holdings Ltd | 0.15 | 1.82 | 1.63 |
| 530079.BO | Faze Three Ltd | 0.22 | 1.24 | 1.05 |
| 530589.BO | Prima Plastics Ltd | 0.24 | 1.91 | 1.61 |
| 776.HK | Imperium Group Global Holdings Ltd | 0.49 | -0.21 | -0.15 |
| SAV.VN | Savimex Corp | 0.2 | 1.38 | 1.19 |
| Low | High | |
| Unlevered beta | 0.1 | 0.67 |
| Relevered beta | 0.1 | 0.72 |
| Adjusted relevered beta | 0.4 | 0.81 |
396.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 396.HK:
cost_of_equity (7.40%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (0.4) + 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.