The WACC of SiS International Holdings Ltd (529.HK) is 5.9%.
Range | Selected | |
Cost of equity | 16.8% - 26.6% | 21.7% |
Tax rate | 23.0% - 27.0% | 25% |
Cost of debt | 4.0% - 4.6% | 4.3% |
WACC | 5.0% - 6.7% | 5.9% |
Category | Low | High |
Long-term bond rate | 2.9% | 3.4% |
Equity market risk premium | 6.0% | 7.0% |
Adjusted beta | 2.33 | 3.26 |
Additional risk adjustments | 0.0% | 0.5% |
Cost of equity | 16.8% | 26.6% |
Tax rate | 23.0% | 27.0% |
Debt/Equity ratio | 6 | 6 |
Cost of debt | 4.0% | 4.6% |
After-tax WACC | 5.0% | 6.7% |
Selected WACC | 5.9% | |
Debt/Equity | Unlevered | |||
Peers | Company Name | ratio | Beta | beta |
529.HK | SiS International Holdings Ltd | 6 | 0.08 | 0.01 |
1822.HK | China Wood International Holding Co Ltd | 0.09 | 0.28 | 0.26 |
1912.HK | Contel Technology Co Ltd | 1.33 | 1.68 | 0.83 |
2166.HK | Smart-Core Holdings Ltd | 0.39 | 0.01 | 0.01 |
2336.HK | Hailiang International Holdings Ltd | 0 | 1.04 | 1.04 |
595.HK | AV Concept Holdings Ltd | 0.09 | 0.8 | 0.74 |
8311.HK | Perfect Optronics Ltd | 0.12 | 1.31 | 1.21 |
854.HK | Willas-Array Electronics (Holdings) Ltd | 1.99 | 0.33 | 0.13 |
SIS.BK | SIS Distribution Thailand PCL | 0.33 | 1.13 | 0.9 |
SYNEX.BK | Synnex (Thailand) PCL | 0.67 | 1.08 | 0.71 |
Low | High | |
Unlevered beta | 0.53 | 0.78 |
Relevered beta | 2.99 | 4.37 |
Adjusted relevered beta | 2.33 | 3.26 |
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 529.HK:
cost_of_equity (21.70%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (2.33) + 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.