600348.SS WACC - Weighted Average Cost of Capital
The WACC of Shan XI Hua Yang Group New Energy Co Ltd (600348.SS) is 8.0%.
| Range | Selected | |
| Cost of equity | 10.5% - 14.2% | 12.35% |
| Tax rate | 25.2% - 27.1% | 26.15% |
| Cost of debt | 5.0% - 5.0% | 5% |
| WACC | 7.1% - 8.9% | 8.0% |
| Category | Low | High |
| Long-term bond rate | 2.7% | 3.2% |
| Equity market risk premium | 6.1% | 7.1% |
| Adjusted beta | 1.27 | 1.48 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 10.5% | 14.2% |
| Tax rate | 25.2% | 27.1% |
| Debt/Equity ratio | 1.03 | 1.03 |
| Cost of debt | 5.0% | 5.0% |
| After-tax WACC | 7.1% | 8.9% |
| Selected WACC | 8.0% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| 600348.SS | Shan XI Hua Yang Group New Energy Co Ltd | 1.03 | 1.09 | 0.62 |
| 000552.SZ | Gansu Jingyuan Coal Industry and Electricity Power Co Ltd | 0.58 | 1.37 | 0.96 |
| 000937.SZ | Jizhong Energy Resources Co Ltd | 0.97 | 0.82 | 0.48 |
| 000983.SZ | Shanxi Coking Coal Energy Group Co Ltd | 0.87 | 1.15 | 0.7 |
| 002128.SZ | Huolinhe Opencut Coal Industry Corp Ltd of Inner Mongolia | 0.17 | 0.97 | 0.87 |
| 600403.SS | Henan Dayou Energy Co Ltd | 0.65 | 1.48 | 1 |
| 600508.SS | Shanghai Datun Energy Resources Co Ltd | 0.26 | 1.31 | 1.1 |
| 600971.SS | Anhui Hengyuan Coal Industry and Electricity Power Co Ltd | 0.26 | 1.3 | 1.09 |
| 601666.SS | Pingdingshan Tianan Coal Mining Co Ltd | 1.77 | 1.3 | 0.56 |
| 601699.SS | Shanxi LuAn Environmental Energy Dev Co Ltd | 0.07 | 1.24 | 1.18 |
| Low | High | |
| Unlevered beta | 0.8 | 0.98 |
| Relevered beta | 1.4 | 1.72 |
| Adjusted relevered beta | 1.27 | 1.48 |
600348.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 600348.SS:
cost_of_equity (12.35%) = risk_free_rate (2.95%) + equity_risk_premium (6.60%) * adjusted_beta (1.27) + 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.