591.HK WACC - Weighted Average Cost of Capital

The WACC of China High Precision Automation Group Ltd (591.HK) is 8.2%.

The Cost of Equity of China High Precision Automation Group Ltd (591.HK) is 8.25%.

The Cost of Debt of China High Precision Automation Group Ltd (591.HK) is 7.25%.

	Range	Selected
Cost of equity	6.70% - 9.80%	8.25%
Tax rate	3.20% - 4.40%	3.80%
Cost of debt	7.00% - 7.50%	7.25%
WACC	6.7% - 9.8%	8.2%

WACC

591.HK WACC calculation

Category	Low	High

Long-term bond rate	2.9%	3.4%
Equity market risk premium	6.0%	7.0%
Adjusted beta	0.64	0.85

Additional risk adjustments	0.0%	0.5%
Cost of equity	6.70%	9.80%

Tax rate	3.20%	4.40%
Debt/Equity ratio	0	0
Cost of debt	7.00%	7.50%

After-tax WACC	6.7%	9.8%


Selected WACC	8.2%

591.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 591.HK:

cost_of_equity (8.25%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (0.64) + 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.