600187.SS WACC - Weighted Average Cost of Capital
The WACC of Heilongjiang Interchina Water Treatment Co Ltd (600187.SS) is 6.4%.
| Range | Selected | |
| Cost of equity | 5.5% - 7.5% | 6.5% |
| Tax rate | 24.4% - 37.8% | 31.1% |
| Cost of debt | 5.0% - 5.0% | 5% |
| WACC | 5.4% - 7.4% | 6.4% |
| Category | Low | High |
| Long-term bond rate | 2.7% | 3.2% |
| Equity market risk premium | 6.1% | 7.1% |
| Adjusted beta | 0.37 | 0.47 |
| Additional risk adjustments | 0.5% | 1.0% |
| Cost of equity | 5.5% | 7.5% |
| Tax rate | 24.4% | 37.8% |
| Debt/Equity ratio | 0.03 | 0.03 |
| Cost of debt | 5.0% | 5.0% |
| After-tax WACC | 5.4% | 7.4% |
| Selected WACC | 6.4% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| 600187.SS | Heilongjiang Interchina Water Treatment Co Ltd | 0.03 | 0.08 | 0.08 |
| 1542.HK | Taizhou Water Group Co Ltd | 52.32 | 0.15 | 0 |
| 1853.HK | Jilin Province Chuncheng Heating Co Ltd | 0 | -0.17 | -0.17 |
| 300262.SZ | Safbon Water Service Holding Inc Shanghai | 2.72 | 0.53 | 0.18 |
| 600283.SS | Qian Jiang Water Resources Development Co Ltd | 0.68 | 0.78 | 0.52 |
| 601199.SS | Jiangsu Jiangnan Water Co Ltd | 0.15 | 0.75 | 0.68 |
| 601368.SS | Guangxi Nanning Waterworks Co Ltd | 3.49 | 0.81 | 0.23 |
| 6136.HK | Kangda International Environmental Company Ltd | 13.77 | 0.44 | 0.04 |
| 6839.HK | Yunnan Water Investment Company Ltd | 155.66 | 0.56 | 0 |
| 688466.SS | GreenTech Environmental Co Ltd | 0.26 | 1.11 | 0.93 |
| Low | High | |
| Unlevered beta | 0.06 | 0.2 |
| Relevered beta | 0.06 | 0.21 |
| Adjusted relevered beta | 0.37 | 0.47 |
600187.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 600187.SS:
cost_of_equity (6.50%) = risk_free_rate (2.95%) + equity_risk_premium (6.60%) * adjusted_beta (0.37) + risk_adjustments (0.75%)
We include the risk adjustments, which range from 0% to 1%, to keep our WACC conservatives, especially for companies traded in developing markets.