47.HK WACC - Weighted Average Cost of Capital

The WACC of Hop Hing Group Holdings Ltd (47.HK) is 7.4%.

The Cost of Equity of Hop Hing Group Holdings Ltd (47.HK) is 9.45%.

The Cost of Debt of Hop Hing Group Holdings Ltd (47.HK) is 7.90%.

	Range	Selected
Cost of equity	8.30% - 10.60%	9.45%
Tax rate	30.00% - 30.80%	30.40%
Cost of debt	7.90% - 7.90%	7.90%
WACC	6.8% - 7.9%	7.4%

WACC

47.HK WACC calculation

Category	Low	High

Long-term bond rate	3.0%	3.5%
Equity market risk premium	5.3%	6.3%
Adjusted beta	0.99	1.04

Additional risk adjustments	0.0%	0.5%
Cost of equity	8.30%	10.60%

Tax rate	30.00%	30.80%
Debt/Equity ratio	1.1	1.1
Cost of debt	7.90%	7.90%

After-tax WACC	6.8%	7.9%


Selected WACC	7.4%

47.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 47.HK:

cost_of_equity (9.45%) = risk_free_rate (3.25%) + equity_risk_premium (5.80%) * adjusted_beta (0.99) + 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.