600162.SS WACC - Weighted Average Cost of Capital
The WACC of Shenzhen Heungkong Holding Co Ltd (600162.SS) is 6.9%.
| Range | Selected | |
| Cost of equity | 8.1% - 11.1% | 9.6% |
| Tax rate | 25.0% - 25.0% | 25% |
| Cost of debt | 5.0% - 5.0% | 5% |
| WACC | 6.1% - 7.7% | 6.9% |
| Category | Low | High |
| Long-term bond rate | 2.7% | 3.2% |
| Equity market risk premium | 6.1% | 7.1% |
| Adjusted beta | 0.88 | 1.04 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 8.1% | 11.1% |
| Tax rate | 25.0% | 25.0% |
| Debt/Equity ratio | 0.85 | 0.85 |
| Cost of debt | 5.0% | 5.0% |
| After-tax WACC | 6.1% | 7.7% |
| Selected WACC | 6.9% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| 600162.SS | Shenzhen Heungkong Holding Co Ltd | 0.85 | 1.43 | 0.87 |
| 000628.SZ | Chengdu Hi-tech Development Co Ltd | 0.22 | 1.45 | 1.24 |
| 000718.SZ | Suning Universal Co Ltd | 0.28 | 1.58 | 1.3 |
| 000797.SZ | China Wuyi Co Ltd | 2.31 | 1.28 | 0.47 |
| 59.HK | Skyfame Realty (Holdings) Ltd | 166.68 | 1.72 | 0.01 |
| 600064.SS | Nanjing Gaoke Co Ltd | 0.71 | 1.26 | 0.82 |
| 600185.SS | Gree Real Estate Co Ltd | 1.19 | 1.01 | 0.54 |
| 600639.SS | Shanghai Jinqiao Export Processing Zone Development Co Ltd | 1.77 | 0.92 | 0.39 |
| 600683.SS | Metro Land Corporation Ltd | 14.43 | 1.16 | 0.1 |
| 601512.SS | China-Singapore Suzhou Industrial Park Development Group Co Ltd | 0.97 | 0.91 | 0.53 |
| Low | High | |
| Unlevered beta | 0.5 | 0.65 |
| Relevered beta | 0.82 | 1.06 |
| Adjusted relevered beta | 0.88 | 1.04 |
600162.SS'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 600162.SS:
cost_of_equity (9.60%) = risk_free_rate (2.95%) + equity_risk_premium (6.60%) * adjusted_beta (0.88) + 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.