442.HK WACC - Weighted Average Cost of Capital
The WACC of Hifood Group Holdings Co Ltd (442.HK) is 7.5%.
| Range | Selected | |
| Cost of equity | 6.4% - 8.6% | 7.5% |
| Tax rate | 0.4% - 0.5% | 0.45% |
| Cost of debt | 6.5% - 7.0% | 6.75% |
| WACC | 6.4% - 8.6% | 7.5% |
| Category | Low | High |
| Long-term bond rate | 2.9% | 3.4% |
| Equity market risk premium | 6.0% | 7.0% |
| Adjusted beta | 0.59 | 0.68 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 6.4% | 8.6% |
| Tax rate | 0.4% | 0.5% |
| Debt/Equity ratio | 0.01 | 0.01 |
| Cost of debt | 6.5% | 7.0% |
| After-tax WACC | 6.4% | 8.6% |
| Selected WACC | 7.5% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| 442.HK | Hifood Group Holdings Co Ltd | 0.01 | 0.08 | 0.08 |
| 1025.HK | KNT Holdings Ltd | 0.38 | 0.5 | 0.36 |
| 1058.HK | Guangdong Tannery Ltd | 0.06 | 0.43 | 0.4 |
| 1657.HK | SG Group Holdings Ltd | 0.02 | 0.54 | 0.53 |
| 8219.HK | Hanvey Group Holdings Ltd | 2.24 | 1.57 | 0.49 |
| 8297.HK | My Heart Bodibra Group Ltd | 0.1 | 0.58 | 0.52 |
| 8456.HK | Mansion International Holdings Ltd | 1.22 | 0.52 | 0.23 |
| 8507.HK | i.century Holding Ltd | 0.8 | 1.56 | 0.87 |
| 8537.HK | Chong Fai Jewellery Group Holdings Co Ltd | 0.81 | 0 | 0 |
| 907.HK | Elegance Optical International Holdings Ltd | 0.07 | 1 | 0.93 |
| Low | High | |
| Unlevered beta | 0.39 | 0.5 |
| Relevered beta | 0.39 | 0.52 |
| Adjusted relevered beta | 0.59 | 0.68 |
442.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 442.HK:
cost_of_equity (7.50%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (0.59) + 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.