The WACC of TDG Holding Co Ltd (600330.SS) is 10.6%.
Range | Selected | |
Cost of equity | 10.3% - 13.0% | 11.65% |
Tax rate | 8.7% - 9.6% | 9.15% |
Cost of debt | 5.0% - 5.0% | 5% |
WACC | 9.4% - 11.7% | 10.6% |
Category | Low | High |
Long-term bond rate | 2.7% | 3.2% |
Equity market risk premium | 6.1% | 7.1% |
Adjusted beta | 1.25 | 1.31 |
Additional risk adjustments | 0.0% | 0.5% |
Cost of equity | 10.3% | 13.0% |
Tax rate | 8.7% | 9.6% |
Debt/Equity ratio | 0.19 | 0.19 |
Cost of debt | 5.0% | 5.0% |
After-tax WACC | 9.4% | 11.7% |
Selected WACC | 10.6% | |
Debt/Equity | Unlevered | |||
Peers | Company Name | ratio | Beta | beta |
600330.SS | TDG Holding Co Ltd | 0.19 | 1.24 | 1.06 |
002636.SZ | Goldenmax International Technology Ltd | 0.23 | 1.65 | 1.36 |
002876.SZ | Shenzhen Sunnypol Optoelectronics Co Ltd | 0.42 | 1.61 | 1.17 |
002913.SZ | Aoshikang Technology Co Ltd | 0.19 | 1.47 | 1.25 |
300679.SZ | Electric Connector Technology Co Ltd | 0.05 | 1.33 | 1.27 |
600366.SS | Ningbo Yunsheng Co Ltd | 0.16 | 1.01 | 0.88 |
603328.SS | Guangdong Ellington Electronics Technology Co Ltd | 0.04 | 1.32 | 1.28 |
603920.SS | Olympic Circuit Technology Co Ltd | 0.05 | 1.55 | 1.49 |
603936.SS | Bomin Electronics Co Ltd | 0.53 | 1.66 | 1.12 |
603989.SS | Hunan Aihua Group Co Ltd | 0.24 | 1.43 | 1.18 |
Low | High | |
Unlevered beta | 1.17 | 1.26 |
Relevered beta | 1.37 | 1.46 |
Adjusted relevered beta | 1.25 | 1.31 |
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 600330.SS:
cost_of_equity (11.65%) = risk_free_rate (2.95%) + equity_risk_premium (6.60%) * adjusted_beta (1.25) + 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.